BEST OF

8 Best Mortgage Lenders for Home Improvement Loans of 2021

Looking to pay for home improvements? NerdWallet picked the best lenders in five categories to help you have a first-rate experience and get the best rates.

NerdWalletJanuary 30, 2021
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When you need to make improvements on a house, there’s more than one way to pay for it. Whether you own the house already or you’re buying a fixer-upper, and whether you’re building an addition or you’re merely renovating a bathroom, you have plenty of options for financing the work if you’re not paying for it out of savings.

NerdWallet researched dozens of prominent mortgage lenders to identify which are among the leaders in five categories of lending for home improvement projects. Happy hammering!

Summary of Best Mortgage Lenders for Home Improvement Loans of 2021

Our pick for

Best cash-out refinance lenders

If you have plenty of equity in your home, you can pay for home improvements by refinancing your mortgage for more than you currently owe. You collect the difference in cash; that’s why this form of refinancing is called a cash-out refi. The cash can be used to pay for the renovations.

Rocket Mortgage by Quicken Loans

at Rocket Mortgage by Quicken Loans

Rocket Mortgage by Quicken Loans: NMLS#3030

4.5

NerdWallet rating 
Rocket Mortgage by Quicken Loans

Min. Credit Score

620

National / Regional

National

at Rocket Mortgage by Quicken Loans


Why we like it

Good for: refinance borrowers who want a fully digital home loan experience powered by Quicken Loans.

Pros

  • Offers conventional and government-backed refinance mortgages.

  • Customized loan recommendations based on refinance goals.

  • Offers document and asset retrieval capabilities.

Cons

  • If you’re a “look me in the eye” type of customer, you’re out of luck.

  • Getting a customized interest rate requires a credit check, which can lower your credit score by a few points.

Read Full Review

Our pick for

Best FHA 203(k) lenders

New American Funding

at New American Funding

New American Funding: NMLS#6606

4.5

NerdWallet rating 
New American Funding

Min. Credit Score

640

Min. Down Payment

3.5%

at New American Funding


Why we like it

Good for: borrowers who need to be evaluated on the basis of nontraditional credit and those interested in various down payment assistance programs.

Pros

  • Uses manual underwriting to evaluate creditworthiness.

  • Offers full online mortgage application, rate quotes, document upload and loan tracking.

Cons

  • Mortgage rates offered to borrowers are higher than the government-reported median of all lenders.

Read Full Review

Our pick for

Best cash-out refinance lenders

Veterans United

at Veterans United

Veterans United: NMLS#1907

4.5

NerdWallet rating 
Veterans United

Min. Credit Score

650

National / Regional

National

at Veterans United


Why we like it

Good for: veterans, active-duty service members and eligible Reservists looking to refinance VA or non-VA loans.

Pros

  • Offers VA IRRRL, or “Streamline,” and cash-out refinance loans.

  • Access to 24/7 customer service over the phone.

  • Has online application and pre-qualification.

  • Offers a free credit counseling service.

Cons

  • Veterans United has physical branch offices in only 18 states.

  • Information on refinances for FHA, USDA and conventional loans is harder to find on their website.

  • Charges higher rates and fees than some other lenders.

Read Full Review

Our pick for

Best Fannie Mae HomeStyle lenders

Fairway Independent Mortgage

at Fairway Independent Mortgage

Fairway Independent Mortgage: NMLS#2289

4.0

NerdWallet rating 
Fairway Independent Mortgage

Min. Credit Score

620

Min. Down Payment

3%

at Fairway Independent Mortgage


Why we like it

Good for: borrowers who want access to a wide variety of mortgages and the convenience of a comprehensive mobile application process.

Pros

  • Offers a robust suite of loan products, including a variety of renovation loans.

  • Has a digital application that can be completed in 10 minutes.

  • Works with some state housing finance agencies to offer mortgages with down payment and closing cost assistance.

Cons

  • Mortgage rates aren't posted online.

Read Full Review

Our picks for

Best HELOC lenders

A home equity line of credit, or HELOC, acts somewhat like a credit card, using your home as collateral. HELOCs have variable rates, and you tap your equity only when you need it.

SunTrust (Truist): NMLS#2915

5.0

NerdWallet rating 
SunTrust (Truist)

National / Regional

National

Max LTV

89.9%


Why we like it

Good for: first-time home buyers, doctors and other borrowers interested in low-down-payment mortgage options.

Pros

  • Offers a wide variety of loan options, including special programs for doctors, entrepreneurs and other professionals.

  • Offers a complete suite of online mortgage application tools and loan tracking.

  • Sample rates and fees are easy to find on the website.

Cons

  • Customized rates aren't available online without starting an application.

  • Branches are limited mostly to the Southeast.

Read Full Review

Flagstar: NMLS#417490

5.0

NerdWallet rating 
Flagstar

National / Regional

National

Max LTV

89%


Why we like it

Good for borrowers who want a wide range of choices — not only among mortgage products, but also in the channel they prefer, whether a branch, online or on the phone.

Pros

  • Offers a wide range of loan types and products, including FHA, VA and USDA.

  • Has a full suite of online conveniences.

  • Does well with rate transparency, and monthly payment estimates add mortgage insurance, when applicable.

Cons

  • Home equity lending is geographically limited.

Read Full Review

Our pick for

Best Fannie Mae HomeStyle lenders

A HomeStyle mortgage allows home buyers and refinancers to roll the costs of renovations into the loan. Qualified first-time home buyers can buy with down payments as low as 3%.

PrimeLending: NMLS#13649

3.5

NerdWallet rating 
PrimeLending

Min. Credit Score

620

Min. Down Payment

3%


Why we like it

Good for: borrowers looking for closing cost assistance, as well as those seeking to renovate or to build a new home.

Pros

  • Full online application includes document uploads and automated loan updates.

  • Offers a "float-down" interest rate lock.

  • Offers a proprietary closing-cost assistance program.

Cons

  • No online mortgage rates — you have to contact the lender for info.

  • Doesn't offer home equity products.

Read Full Review

Our pick for

Best FHA 203(k) lenders

The Federal Housing Administration’s 203(k) program lets borrowers include renovation costs in an FHA-insured mortgage. The loan amount takes into account the home’s current value, its future value after renovations are completed, and how much the work will cost.

HomeBridge: NMLS#6521

3.5

NerdWallet rating 
HomeBridge

Min. Credit Score

550

Min. Down Payment

3.5%


Why we like it

Good for borrowers who want a loan officer's help, in person or on the phone, when deciding among the wide range of available mortgage options — including loans to buy and renovate.

Pros

  • Offers a full array of mortgage products, including government and renovation loans.

  • Has loans for most purposes, including purchase, refinance and jumbo mortgages.

  • Online portal keeps borrowers up-to-date on the loan application's progress.

Cons

  • Doesn't post interest rates on its site.

  • Doesn’t offer home equity loans or lines of credit.

Read Full Review

More ways to pay for home improvements

In addition to the mortgage options listed above, homeowners can consider unsecured personal loans that are not backed by collateral such as one’s home. Personal loan interest rates are higher, but borrowers won’t put their homes at risk. Check out NerdWallet's selections for some of the best personal loans for home improvements.

More from NerdWallet

Last updated on January 30, 2021

Methodology

NerdWallet's star ratings for mortgage lenders are awarded based on our evaluation of the products and services each lender offers to consumers who are actively shopping for the best mortgage. The five key areas we evaluated include the variety of loan types and products offered, online conveniences, online mortgage rate information, and the rate spread and origination fee lenders reported in the latest available Home Mortgage Disclosure Act data. To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.

To recap our selections...

NerdWallet's Best Mortgage Lenders for Home Improvement Loans of 2021