Best Mortgage Lenders of March 2023
Before buying a home or refinancing a mortgage, shop around to find some of the best mortgage lenders for your circumstances.
Some or all of the mortgage lenders featured on our site are advertising partners of NerdWallet, but this does not influence our evaluations, lender star ratings or the order in which lenders are listed on the page. Our opinions are our own. Here is a list of our partners.
When you buy a home, it's a big financial decision, so it makes sense to find the best mortgage lender you can. To do that, shop for offers from at least three lenders.
Compare mortgage rates and other loan elements such as fees, terms, time to close, the availability of online application and loan tracking, and customer service offerings. Taking the time to make an informed decision can save you thousands of dollars over the life of your loan.
To help you choose a mortgage lender, NerdWallet’s editorial team has picked some of the best out there in a variety of categories (best overall, best for first-time home buyers, best for FHA loans and best for VA loans) to help you find the home loan that's right for you.
Here are more of our picks for best mortgage lenders.
For homeowners who want to tap into home equity:
For borrowers who have credit challenges:
For borrowers who want to refinance:
When you buy a home, it's a big financial decision, so it makes sense to find the best mortgage lender you can. To do that, shop for offers from at least three lenders.
Compare mortgage rates and other loan elements such as fees, terms, time to close, the availability of online application and loan tracking, and customer service offerings. Taking the time to make an informed decision can save you thousands of dollars over the life of your loan.
To help you choose a mortgage lender, NerdWallet’s editorial team has picked some of the best out there in a variety of categories (best overall, best for first-time home buyers, best for FHA loans and best for VA loans) to help you find the home loan that's right for you.
Here are more of our picks for best mortgage lenders.
For homeowners who want to tap into home equity:
For borrowers who have credit challenges:
For borrowers who want to refinance:
Best Mortgage Lenders
Lender | NerdWallet rating | Min. credit score | Min. down payment | Learn more |
---|---|---|---|---|
![]() Better: NMLS#330511 Check Rate on NerdWallet | Best for overall experience | 620 | 3% | Read review Check Rate on NerdWallet |
![]() Flagstar: NMLS#417490 Check Rate on NerdWallet | Best for first-time buyers | 620 | 3% | Read review Check Rate on NerdWallet |
![]() Freedom Mortgage: NMLS#2767 Check Rate on NerdWallet | Best for FHA loans | 500 | 3.5% | Read review Check Rate on NerdWallet |
![]() Guaranteed Rate: NMLS#2611 Check Rate on NerdWallet | Best for overall experience and FHA loans | 620 | 3% | Read review Check Rate on NerdWallet |
![]() Navy Federal: NMLS#399807 Check Rate on NerdWallet | Best for VA loans | N/A | 0% | Read review Check Rate on NerdWallet |
NBKC: NMLS#409631 at NBKC Check Rate on NerdWallet | Best for overall experience, first-time buyers and VA loans | 620 | 3% | at NBKC Check Rate on NerdWallet |
![]() Pennymac: NMLS#35953 at Pennymac Check Rate on NerdWallet | Best for FHA loans | 580 | 3.5% | at Pennymac Check Rate on NerdWallet |
![]() PNC: NMLS#446303 Check Rate on NerdWallet | Best for overall experience and first-time buyers | 620 | 3% | Read review Check Rate on NerdWallet |
![]() PrimeLending: NMLS#13649 Check Rate on NerdWallet | Best for first-time buyers | 620 | 3% | Read review Check Rate on NerdWallet |
![]() Truist: NMLS#399803 Check Rate on NerdWallet | Best for first-time buyers | 620 | 3% | Read review Check Rate on NerdWallet |
![]() Veterans United: NMLS#1907 Check Rate on NerdWallet | Best for VA loans | 620 | 0% | Read review Check Rate on NerdWallet |
How does a mortgage work?
A mortgage is a loan to purchase a home. The loan is repaid with interest in monthly payments over a certain number of years, such as 15, 20 or 30. If the mortgage isn't repaid, the borrower may lose the home in a multistage process known as foreclosure.
Banks, credit unions and other lenders offer mortgages. To apply, fill out an application and provide documentation about your finances. Lenders consider your income, debts and credit score to decide whether you qualify and the terms to offer.
» MORE: What is a mortgage?
Types of mortgages
There are a variety of mortgages and home loan programs. Here are some of your choices.
Fixed vs. adjustable rates
There are fixed-rate and adjustable-rate mortgages. The interest rate stays the same for the entire loan term of a fixed-rate mortgage. With an adjustable-rate mortgage, or ARM, the interest rate stays the same for a certain period, up to 10 years, and then adjusts at a specified interval, usually every six months.
15-, 20- and 30-year mortgages
The most popular mortgage term is 30 years, but 15- and 20-year mortgages are also available. Mortgage payments are spread out monthly through the term. At the end, the loan is paid off and the borrower owns the property free and clear.
Government-backed mortgages
These loans are backed by the federal government:
FHA mortgages are backed by the Federal Housing Administration. They allow down payments as low as 3.5% and have more lenient credit score requirements than other loan programs. Borrowers must pay for mortgage insurance.
USDA mortgages, backed by the U.S. Department of Agriculture and meant for rural home buyers, do not require a down payment, but borrowers must pay an upfront and annual guarantee fee, similar to mortgage insurance for FHA loans.
VA loans, backed by the U.S. Department of Veterans Affairs, are for veterans and active military members. VA mortgages require no down payment, but borrowers pay a one-time VA funding fee, which can be rolled into the loan.
Conventional loans
Conventional loans are mortgages that are not backed by the federal government. Some conventional loans have down payment requirements as low as 3% — but typically, borrowers must pay for private mortgage insurance if they put down less than 20%.
Conventional mortgages can be conforming or nonconforming. Conforming conventional mortgages fall within certain dollar amount limitations set every year by the Federal Housing Finance Agency. They also meet underwriting guidelines set by Fannie Mae and Freddie Mac, the government-sponsored entities that buy conforming loans.
Nonconforming loans don’t abide by those limits and guidelines. For example, jumbo loans are conventional mortgages that exceed the conforming loan limits. They also typically have stricter criteria for approval than other mortgages.
What’s the credit score needed for a home loan?
The credit score needed to buy a home depends on the type of loan and the lender. Most borrowers have scores in the high 600s to 700s. FHA loans generally have the most lenient credit score requirements.
How to compare mortgage rates
You can check current mortgage rates to see the average of what lenders are offering. Then get initial quotes online from some lenders based on your location, loan term, purchase price, down payment amount and other factors.
To get a firm quote, you'll need to apply for preapproval. During the preapproval process, the lender will check your credit and verify your financial information, such as income, assets and debts.
How to shop for a mortgage lender
The time to shop for a mortgage lender is before you start house hunting. Getting preapproved for a mortgage will show real estate agents and sellers that you're a serious buyer. It's smart to get preapproved and then get Loan Estimates from more than one lender. The Loan Estimate provides details about the loan terms, monthly payment and estimated closing costs. With those pieces of information, you can compare offers and choose the best deal.
More from NerdWallet:
Last updated on March 6, 2023
Methodology
NerdWallet's editorial team selected its list of best mortgage lenders based on the following methodologies:
NerdWallet's overall 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 four key areas we evaluated include the variety of loan types offered, ease of application, mortgage rate transparency, and our analysis of the rates and fees lenders reported in the latest available Home Mortgage Disclosure Act data. “Best for overall experience” indicates the highest scoring lenders in the overall star rating rubric.
All reviewed mortgage lenders that offer programs for first-time home buyers were evaluated based on (1) the portion of their business dedicated to FHA and VA lending, (2) their ability to offer conventional loans with a down payment as low as 3%, (3) their origination fees, (4) their proprietary first-time home buyer loans or assistance (e.g., grants or loans to cover down payment and closing costs), (5) mortgage rate transparency, and (6) the ease of their online application. The highest scoring lenders appear on this page. “Best for first-time buyers” indicates the highest scoring lenders in the first-time home buyer rubric.
All reviewed mortgage lenders that offer FHA loans were evaluated based on (1) the portion of their business dedicated to FHA lending, (2) their FHA origination fees, (3) the range of FHA loans offered, (4) their rate transparency and (5) the ease of their online application. “Best for FHA loans” indicates the highest scoring lenders in the FHA loans rubric.
All reviewed mortgage lenders that offer VA loans were evaluated based on (1) their VA purchase and refinancing options (2) the portion of their business dedicated to VA lending, (3) their VA origination fees, (4) their rate transparency, and (5) the ease of their online application. “Best for VA loans” indicates the highest scoring lenders in the VA loans rubric.
To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.
To recap our selections...
NerdWallet's Best Mortgage Lenders of March 2023
- Better: Best for overall experience
- Flagstar: Best for first-time buyers
- Freedom Mortgage: Best for FHA loans
- Guaranteed Rate: Best for overall experience and FHA loans
- Navy Federal: Best for VA loans
- NBKC: Best for overall experience, first-time buyers and VA loans
- Pennymac: Best for FHA loans
- PNC: Best for overall experience and first-time buyers
- PrimeLending: Best for first-time buyers
- Truist: Best for first-time buyers
- Veterans United: Best for VA loans
Frequently asked questions
The answer depends on your needs. Lenders vary by the types of loans and services they offer as well as their credit score minimums and other requirements for borrowers. The best mortgage lender is the one that offers the products you need, has requirements you can meet and charges the lowest mortgage rates and fees.
Some lenders post mortgage rates on their websites and include tools to see how much your rate might be. But those are just estimates. You'll need to get preapproved for a mortgage to get a rate offer based on your credit score and other financial information.
Closing costs are the various fees and expenses you pay to finalize the mortgage. Closing costs typically run between about 2% and 5% of the loan amount. That means on a $300,000 home loan, you could pay $6,000 to $15,000 in closing costs.
Most state housing finance agencies offer first-time home buyer programs, which can include closing cost and down payment assistance. The assistance can come in the form of a grant, a forgivable loan or a deferred-payment loan. To qualify, you need to work with a lender approved by the state agency.
You should shop for a lender first and get preapproved for a mortgage before shopping for a house. A mortgage preapproval shows sellers and their real estate agents that you're a serious buyer. It also indicates how much you can borrow, which will help you determine how much home you can afford.