BEST OF

5 Tips for Finding the Best Mortgage Lenders

Before buying a home, shop around for the best mortgage lenders. Get tips on finding the right lender for you, and see our top picks for a variety of needs.

NerdWalletMay 31, 2019
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own.

NOTE: Due to the coronavirus outbreak, obtaining a mortgage may be a bit of a challenge. Lenders are dealing with demand and staffing issues. If you can’t pay your current home loan, refer to our mortgage assistance resource. For the latest information on how to cope with financial stress during this emergency, see NerdWallet’s financial guide to COVID-19.

When you buy a home, you’re in it for the long haul. You’ll have a mortgage payment for 15, 20 or 30 years, so it’s smart to shop around to find the best mortgage lenders out there.

How to look for a lender Finding a mortgage lender involves more than just getting a good interest rate; you want to work with the best mortgage companies, staffed by professionals who will guide you through the process.

Below are five tips to help you hunt for the best mortgage lender.

  1. Get your credit score in shape. The higher your credit score, the more bargaining power you’ll have.

  2. Know the mortgage lending landscape. We've done some of the homework for you below.

  3. Get preapproved for your mortgage. Boost your chances of having your offer accepted by getting preapproved.

  4. Compare rates from several mortgage lenders. You can search for the best mortgage rates online.

  5. Ask the right questions and read the fine print. Find out about requirements and fees, including costs beyond principal and interest payments.

NerdWallet has researched some of the best available major national mortgage lenders to help you quickly find the right lender for your needs.

Summary of 5 Tips for Finding the Best Mortgage Lenders

Logo

at Rocket Mortgage

Rocket Mortgage by Quicken Loans: NMLS#3030

Logo

Min. Credit Score

620

Min. Down Payment

3%

at Rocket Mortgage


Why we like it

Good for: borrowers who appreciate smartphone and online convenience for a fully digital home loan experience powered by Quicken Loans.

Pros

  • Caters to self-service users who want to apply for a home loan online and talk to a human only as necessary.

  • Estimates the loan amount you’ll qualify for within minutes.

  • 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
Logo

at New American

New American Funding: NMLS#6606

Logo

Min. Credit Score

620

Min. Down Payment

3%

National / Regional

National

at New American


Why we like it

Ideal for borrowers who need to be evaluated on the basis of nontraditional credit. New American Funding offers FHA and VA loans, works with down payment assistance programs, and helps borrowers whose credit histories don't fit the mold of traditional banking.

Pros

  • Uses manual underwriting to evaluate creditworthiness.

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

  • Home equity lending sets it apart from most non-bank lenders.

Cons

  • Services not available in all 50 states.

Read Full Review
Logo

at Quicken Loans

Quicken Loans: NMLS#3030

Logo

Min. Credit Score

620

Min. Down Payment

3%

at Quicken Loans


Why we like it

Good for: borrowers looking for just about all of the services your neighborhood lender does — with online convenience.

Pros

  • Quicken Loans couples a fully online application with available mortgage advisors for those who want a human touch.

  • Instantly verifies employment and income for many working Americans.

  • Offers custom fixed-rate loan terms that are between eight and 30 years.

  • Provides a wide variety of loan types, including renovation loans and all government-backed mortgage products.

Cons

  • Quicken Loans doesn't offer home equity loans or HELOCs.

  • Quicken's lender fees can be stout and they don't offset those fees with particularly low mortgage rates.

Read Full Review
Logo

at Guaranteed Rate

Guaranteed Rate: NMLS#2611

Logo

Min. Credit Score

620

Min. Down Payment

3%

at Guaranteed Rate


Why we like it

Good for borrowers seeking conventional or government-backed loans, and a totally online experience.

Pros

  • Offers the ability to securely upload and digitally sign loan documents.

  • Displays detailed sample rates for many of its loan products.

Cons

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

Read Full Review
Logo

at Reali Loans

Reali Loans: NMLS#991397

Logo

Min. Credit Score

620

Min. Down Payment

5%

at Reali Loans


Why we like it

Good for: borrowers looking for an online mortgage application experience.

Pros

  • Offers a completely online application process.

  • Provides customized rate quotes online.

Cons

  • Available only in a dozen states.

  • Loan selection is limited.

Read Full Review

Chase: NMLS#399798

Logo

Min. Credit Score

620

Min. Down Payment

3%


Why we like it

Good for borrowers who want to choose among a wide array of mortgage types from a bank with offices in more than half the states that charges below-average origination fees.

Pros

  • Allows electronic submission and tracking of loan documents.

  • Carries a wide variety of mortgage types and products.

  • Generally offers good rates and charges reasonable fees.

Cons

  • Doesn't offer home improvement loans, such as FHA 203(k) and HomeStyle.

  • You have to speak with a home loan advisor to complete the application.

Read Full Review

Citibank: NMLS#412915

Logo

National / Regional

National

Min. Down Payment

3%


Why we like it

Good for: Borrowers wanting to compare mortgage rates online for a variety of loan options.

Pros

  • Offers a wide variety of loan options, including low-down-payment mortgages and jumbo mortgages.

  • Provides customizable mortgage rates on its website.

  • Offers low rates and fees compared to other lenders.

Cons

  • Charges a mortgage application fee.

  • Requires help from a mortgage loan officer to complete the loan application online.

Read Full Review

Bank of America: NMLS#399802

Logo

Min. Credit Score

620

Min. Down Payment

3%


Why we like it

Ideal for borrowers who prefer a traditional bank. Bank of America offers a wide array of mortgages and online account management tools. It also has first-time home buyer loans with low down payments and no mandatory mortgage insurance.

Pros

  • Allows borrowers to apply entirely online.

  • Offers down payment and closing cost assistance programs.

  • May give existing customers a discount on mortgage lender origination fees.

Cons

  • Does not offer renovation loans.

Read Full Review

5 tips for finding the best mortgage lenders

To get a jump-start on the mortgage loan process, use these five tips to find the best lender for you.

1. Get your credit score in shape

Not everyone can qualify to buy a home; you have to meet certain credit and income criteria to assure mortgage companies you can repay the loan.

A low credit score signals that lending to you is risky, which means a higher interest rate on your home loan. The higher your credit score and the more on-time payments you make, the more power you’ll have to negotiate for better rates with potential lenders. Generally, if you have a score under 580, you’ll have a tough time qualifying for most types of mortgages.

To elevate your credit score, first make sure your credit reports are accurate and free of errors. Get your report from the three major credit bureaus: Equifax, Experian and TransUnion. Each is required to provide you with a free copy of your report once every 12 months.

Next, try to pay off high-interest debts and lower your overall level of debt as quickly as possible. By lowering your debt, you’ll improve your debt-to-income ratio. Paying off credit cards and recurring loans before you buy a home will also free up more money for the down payment.

2. Know the lending landscape

Understanding the major players will help you navigate the crowded lending field. Here are the most common types of home lenders:

  • Credit unions: These member-owned financial institutions often offer favorable interest rates to shareholders. And many have eased membership restrictions, so it’s likely you can find one to join.

  • Mortgage bankers: They work for a specific financial institution and package loans for consideration by the bank’s underwriters.

  • Correspondent lenders: Correspondent lenders are often local mortgage loan companies that have the resources to make your loan, but rely instead on a pipeline of other lenders, such as Chase, to whom they immediately sell your loan.

  • Savings and loans: Once the bedrock of home lending, S&Ls are now a bit hard to find. But these smaller financial institutions are often community-oriented and worth seeking out.

  • Mutual savings banks: Another type of thrift institution, like savings and loans, mutual savings banks are locally focused and often competitive.

Check if each lender you consider is registered in the state where you're shopping. You can do that through the Nationwide Multistate Licensing System Registry. Also, search the Better Business Bureau for unbiased reviews and information.

3. Get preapproved

Getting a mortgage preapproval letter before you start looking at houses will give you an edge when bidding against other buyers. The letter shows the seller that you're a serious buyer whose loan is likely to close. It's evidence that a lender has evaluated your finances and figured out how much you can afford to borrow, and therefore how much house you can afford.

Getting preapproved now will also save time later. When you're ready to make an offer on a home, lenders will already have the information they need to process your home loan.

To get preapproved, you’ll have to provide lenders your financial information. Here’s a list of what a lender typically requires:

  • Social Security numbers for yourself and any co-borrowers

  • Bank, savings, checking, investment account information

  • Outstanding debt obligations, including credit card, car loan, student loan and other balances

  • Two years of tax returns, W-2s and 1099s

  • Salary and employer information

  • Information about how much of a down payment you can make, and where the money is coming from

Get preapproved by more than one lender. Then you can compare Loan Estimate forms from each one to determine who offers you the best rates and terms.

4. Compare rates from several mortgage lenders

Start by searching for the best mortgage rates online. Keep in mind that the rate quote you see online is an estimate. A lender or broker will have to pull your credit information and process a loan application to provide an accurate rate, which you can then lock in if you’re satisfied with the product.

Once you have several quotes in hand, compare costs and decide which one makes the most financial sense for you. Use your research as leverage to negotiate for the best mortgage rates possible.

While there’s more to finding a good lender than picking the lowest rate, that doesn’t mean the rate isn’t important. The total interest you pay over the life of the loan is a big figure, and a low rate can save you thousands of dollars.

» MORE: Use our mortgage calculator to find out your monthly mortgage payment.

5. Ask the right questions and read the fine print

Narrow your choices by asking for lender referrals from friends, family or your real estate agent, or by reading online reviews. Once you have some names, it’s time to ask:

  • How do you prefer to communicate with clients — email, text, phone calls or in person? How quickly do you respond to messages?

  • How long are your turnaround times on preapproval, appraisal and closing?

  • What lender fees will I be responsible for at closing? (Fees may include commission, loan origination, points, appraisal, credit report and application fees.)

  • Will you waive any of these fees or roll them into my mortgage?

  • What are the down payment requirements?

Also, check with your mortgage lender or broker if buying discount points to lower your rate makes sense. If you buy points, you’re paying some interest upfront in exchange for a lower rate on your mortgage.

This might be a good move if you plan on living in the home for a long time.

Principal and interest payments on a mortgage aren’t the only costs of buying a home; you should ask your lender about others, including closing costs, points, loan origination fees and other transaction fees. If you’re unsure of something, ask for an explanation. For more on those fees, see Mortgage closing costs explained.

Most mortgage lenders will require an “earnest money” deposit to start the loan process. Ask the lender to specify under what circumstances the earnest money cannot be returned, and if the answer is vague, keep shopping around.

Always examine the fine print on your loan documents. These will tell you the exact finance terms, who pays which closing costs, what items are and aren’t included with the home, whether there’s a home inspection contingency, the closing date and other important details.

Last updated on May 31, 2019

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 5 Tips for Finding the Best Mortgage Lenders