Best VA Loans of 2020

VA loan rates

If you’re active-duty military or a veteran considering whether to buy or refinance a home, you may want to look into current VA mortgage rates. VA loans are loans that are insured by the U.S. government through the U.S. Department of Veterans Affairs, providing an excellent solution for military service members and their families when looking to buy a home.

Low interest rates and flexible lending requirements are just a few of the benefits military families can enjoy when choosing a VA loan. However, the 0% down option is what truly sets VA loans apart. These loans can be a better fit than other types of loans for military members because of the military-focused benefits they offer, so it’s important to weigh them against other options when seeking a mortgage loan.

While VA loans can be a great money-saving tool for active military and veterans, finding the lender with the best VA loan rates can be challenging. There are, after all, a wide variety of lenders to consider, and each lender offers its own rates and has its own lending requirements.

To help take the guesswork out of the process, you’ll find some of the best VA loan rates available through the lenders below. This guide will also cover the fundamentals of VA loans and what you need to know when choosing between these top VA lenders.

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5 best VA loans of 2020

Veterans United: Best customer satisfaction

One of the largest VA mortgage lenders in the U.S., Veterans United limits its focus to only VA loans, offering superior customer satisfaction compared to many other lenders.

As is typical of VA loans, there is no minimum down payment required to secure a VA loan through Veterans United. In addition to the easy online application process, Veterans United is home to the Lighthouse program, offering credit counseling services to help active duty military and veterans build and improve upon their credit scores, manage their finances, set budgets and secure VA loan preapproval.

Veterans United offers 30-year and 15-year fixed loan options with competitive APR percentages and touts high rates of customer satisfaction.

USAA: Best one-stop shop solution

Not only a VA mortgage lender, USAA provides a full breadth of financial services, including insurance, lending, banking, investment and retirement planning. USAA’s products and services are exclusive to military customers. It provides both conventional mortgage products as well as VA primary, refinance, jumbo and cash-out loans.

USAA’s refinance loans in particular offer an excellent solution for military members and their families. Through this option, USAA will pay for the appraisal, title and VA funding fee, effectively eliminating out-of-pocket expenses for mortgage refinancing.

One of the most unique attributes of USAA is that it is member-owned, much like a credit union, but it offers the full range of financial services one would expect to find at a bank. It’s an excellent one-stop shop solution for all your financial planning needs.

Navy Federal Credit Union: Best for additional services

In addition to their VA mortgage loans, Navy Federal Credit Union offers a host of additional services that other lenders do not. The Freedom Lock program from NFCU allows military members and veterans to lock in their interest rates on their loans, regardless of whether or not rates increase. What’s unusual is that with this program, customers can readjust their VA home loan rates to the lower rate at no additional cost if interest rates decrease.

The Real Match Guarantee program from NFCU also provides a great incentive for veterans and military members to choose Navy Federal Credit Union. This program states that if a lower VA interest rate is found with another lender, Navy Federal Credit Union will either match the rate or deposit $1,000 into the customer’s account — as long as they receive supporting documentation.

Quicken Loans: Best online experience

Quicken Loans provides the best online experience for military members seeking a more self-service approach to banking, with available access to live mortgage experts when needed. In order to qualify for a VA loan through Quicken Loans, veterans and military members will need to provide a certificate of eligibility and prove that they have a minimum FICO® score of 620 or higher. In addition, the debt-to-income ratio (DTI) should be no more than 60%.

Currently, Quicken Loans offers 30-year, 25-year,and 15-year fixed VA loans with VA home loan rates of 3.125%, 3.125% and 2.875%, respectively. The APR for 30-year, 25-year and 15-year fixed loans is 3.566%, 3.639% and 3.674%, respectively.

Pentagon Federal Credit Union: Best overall experience

The Pentagon Federal Credit Union is one of the top credit unions in the country and serves military members and their families. Providing 30- and 15-year fixed VA home loans, this credit union also provides a host of additional banking services, including student refinancing, personal loans, rewards credit cards and auto loans.

The current VA mortgage rates through Pentagon Federal Credit Union are 2.75% for both 30- and 15-year fixed loans. APR rates for 30-year loans are offered as low as 2.877%, while the 15-year loan APR is offered as low as 2.984%.

Compare 5 Best VA Loan Rates of 2020

Lender30-Year APR15-Year APRMin. Credit ScoreMin. Down Payment
Veterans United2.559%2.813%720$0
USAA3.844%4.028%740$0
Navy Federal Credit Union3.195%3.224%Not Listed$0
Quicken Loans3.823%2.942%620$0
Pentagon Federal Credit Union2.877%2.984%720$0

*Rates accurate as of July 29, 2020.

VA mortgage rates today

Mortgage rates overall are currently at an all-time low due to nationwide economic issues stemming from the coronavirus pandemic. However, due to the already-low nature of VA home loan rates, VA mortgage rates have experienced little change over the last couple of months. The average VA loan interest rate as of July 8, 2020 is 2.5% for a 30-year fixed mortgage.

What is a VA Loan?

A VA loan, also known as a Veterans Affairs loan, is a mortgage option backed by the United States government that requires no down payment and has easier qualifications for military service members and their spouses.

Private lenders issue these loans, and they are guaranteed by the U.S. Department of Veterans Affairs. These loans were designed specifically for active military homebuyers, many of which have difficulties getting approved for standard loans due to low or no credit and unique circumstances related to serving in the military.

However, it’s important to note that while VA loans have less stringent eligibility requirements than traditional loans, some lenders will have their own set of criteria, such as requiring a small down payment, higher credit score or more extensive credit history for applicants to qualify. Be sure you understand the requirements for qualification with each lender before you apply.

When should I use a VA loan?

Deciding when to use a VA loan depends on several factors. First, you need to make sure you qualify. If you are active-duty, a veteran or have served at least six years in the National Guard or Reserves, you are likely eligible. Once you determine your eligibility, you should look to see if the benefits are something you are interested in.

If you’re looking to buy a home but don’t want to make a down payment or pay for private mortgage insurance, it may be the right time to use a VA loan.

Additionally, a VA loan must be used on your primary residence and may carry additional fees if it’s not the first time you’ve used it. VA loans also carry a maximum loan amount that changes each year, which may limit the options available if you’re planning to buy a more expensive home.

For most U.S. counties, the 2020 limit is $510,400 — an increase from $484,350 in 2019. However, in more expensive housing markets, the limit can be as high as $756,600 — an increase from $726,525 in 2019.

If you’re looking to secure the best loan rate in 2020 without making a large down payment, it may be the right time to consider a VA loan. If you want to see how a VA loan can benefit you and your family, be sure to check out our helpful mortgage calculator.

VA loans vs. other mortgage types

VA loans vs. conventional loans

When considering whether or not a VA loan makes sense for you, there are a few things you should know when comparing these lans against conventional loan options.

First, VA loans are typically only able to be used for your primary residence while conventional loans can be used for primary, secondary or investment properties. Overall, VA loans are much easier to obtain than conventional loans, requiring no money down and much more lenient application requirements.

Another benefit of VA loans is that they generally have a lower interest rate by default when compared to conventional loans. However, in today’s post-coronavirus financial climate, many conventional loans reflect similar rates as VA home loan rates. For example, the VA home loan rates through Quicken Loans for a 30-year fixed mortgage are currently 3.125%, and the same is true for their conventional mortgage rates.

VA loans vs. FHA loans

An FHA loan, also known as a Federal Housing Administration loan, is another form of mortgage loan backed by the U.S. government. However, there are some differences between FHA and VA loans to consider.

FHAs typically have more flexible credit score requirements than VA loans, with the minimum FICO requirement for an FHA loan being 580 instead of 620. However, VA loans are still more lenient in terms of eligibility requirements, such as bankruptcies and short sales.

While both FHA and VA loans provide great financing options for active military, FHA loans still require a 3.5% down payment. This pales in comparison to the fact that VA loans don’t require any money down.

VA loans vs. USDA loans

USDA loans, otherwise known as the United States Department of Agriculture loans, are another government-backed financing option offered through private lenders. Although similar to VA loans, there are some subtle differences to note when deciding whether a USDA loan makes sense for your situation.

The most significant difference between VA and USDA loans is eligibility. While VA loans are only eligible to active military personnel and their spouses, USDA loans are available to the general public, provided they live in a rural area that qualifies. USDA loans do have income limitations, while VA loans are generally unrestricted in this aspect.

Unlike VA loans, USDA loans can be used for general building repairs, renovations, home relocations and utility setups.

The final word

VA loans offer a unique way for people that have or are serving their country to purchase a home with no down payment and no PMI. While many VA loans are similar, it’s still important that you take the time to shop lenders and find the right choice for you. Reaching the goal of homeownership is much easier for members of the armed services thanks to Veteran Assistance loans.

Carly Severino

Contributing Finance Writer

Carly Severino is a freelance copywriter and editor with more than 15 years of writing experience, and is the current founder of Word Nerd Writing & Editing Services. Specializing in content marketing and SEO, she is adept at helping businesses meet their objectives through strategic planning and flawless copy.