5 Tips for Finding the Best Mortgage Lenders

Mortgage Process, Mortgages
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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, after all, so it’s smart to shop around to find the best mortgage lenders out there. Keep reading for tips on how to shop around.

Here are our picks for mortgage lenders, listed by category:

Best mortgage lenders for first-time homebuyers

Best mortgage lenders for refinancing

Best online mortgage lenders

Best mortgage lenders for face-to-face service

Best mortgage lenders for borrowers with bad credit

Best for borrowers who want to talk to a mortgage advisor

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. For details, click here.

  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. Compare rates from several mortgage lenders. You can search for the best mortgage rates online or get rates delivered to your inbox daily.
  4. Ask the right questions. Find out about communication, fees and requirements.
  5. Read the fine print. Principal and interest payments aren’t the only costs of homeownership.

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

Best mortgage lenders for first-time homebuyers

Lenders who cater to first-time homebuyers usually offer FHA loans or other programs with low down-payment requirements, as well as loans to borrowers with lower credit scores.

Quicken Loans
  • Quicken Loans is the largest FHA lender in the nation.
  • Quicken also has a 1% down payment program for qualified buyers.
  • Its Rocket Mortgage app allows you to complete the application process online.
  • Quicken Loans review
WF-Logo-270-55
  • Wells Fargo is one of the largest FHA lenders in the nation.
  • The bank also offers its yourFirst Mortgage program, with as little as 3% down.
  • It provides down payment assistance, such as LIFT grants, in selected neighborhoods.
  • Wells Fargo mortgage review

 

>>MORE: Best mortgage lenders for first-time home buyers.

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Best mortgage lenders for refinancing

You’ve been through the mortgage process once, but are set to do it again. These lenders offer excellent home loan refinancing.

lenda-logo-270
  • Experienced mortgage refinance lender, with no origination fees or broker commissions.
  • Minimum 640 credit score qualification.
  • A suggestion engine will look at the info you provide and determine if there are things you can do to lower your rate.
  • Lenda review
Chase-logo
  • Chase consistently offers some of the lowest refinance rates among major national lenders, according to the NerdWallet Mortgage Rate Index.
  • Offers the HARP federal refinance program to eligible homeowners.
  • Chase also writes FHA and VA refinance home loans.
  • Chase mortgage review

 

>>MORE: Best mortgage lenders for refinancing.

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Best online mortgage lenders

If you prefer doing business online rather than face to face, these mortgage lenders provide an online application process.

Rocket Mortgage
  • The company provides loan applications online and through a mobile app.
  • Many financial details can be imported, reducing the hassle of compiling them yourself.
  • Gives a loan decision in minutes.
  • Rocket Mortgage review
guaranteed-rate-logo-55x270
  • Offers online application process with secure document uploads and digital signature acceptance.
  • Provides credit scores from all three bureaus for free.
  • Has 170 branches across the nation for questions better handled in person.
  • Guaranteed Rate review

 

>>MORE: Best online mortgage lenders.

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Best mortgage lenders for face-to-face service

If you want to talk to a mortgage loan officer, you’ll find these lenders have offices across the nation and likely in your neighborhood.

BOA-logo
  • Provides an online tool that keeps you up to date on the status of your mortgage application.
  • Mortgage specialists to assist in the loan process.
  • Offers an online home value estimator.
  • Bank of America mortgage review
WF-Logo-270-55
  • Perennially one of the highest-volume mortgage lenders in the country.
  • You can upload loan documents securely online and track your loan’s process.
  • Offers jumbo purchase loans and refinances for higher-value homes.
  • Wells Fargo mortgage review

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Best mortgage lenders for borrowers with bad credit

A low credit score can sink a borrower’s chance to buy a home. These lenders have programs that can help.

caliber-home-loans-55x270
  • Offers products for borrowers with low credit scores or past financial troubles, including ‘Fresh Start’ mortgage.
  • Uses behind-the-scenes technology to speed up mortgage process.
  • Offers full line of mortgage loan products.
  • Caliber Home Loans review
carrington
  • Specializes in loans to borrowers with lower credit scores, minimum score 500 in some cases.
  • Offers down payment assistance programs through housing authorities in some states.
  • Requires online education course for borrowers.
  • Carrington Mortgage review

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Best for borrowers who want to talk to a mortgage advisor

Unsure which lender is right for you? Consider working with a mortgage advisor who can help you find the home loan that’s just right for you, saving time and reducing hassle.

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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 your 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 build 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.


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2. Know the lending landscape

It’s difficult to discern who the best mortgage lenders are in a crowded field. Here are the most common types of lenders you’ll choose from:

  • 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: Bankers who 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 Wells Fargo and 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 very 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.

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

3. Compare rates from several mortgage lenders

This is where homework and a lot of patience come into play. As noted, there are all kinds of mortgage lenders — neighborhood banks, big commercial banks, credit unions and online mortgage lenders. You have more options than ever.

You can search for the best mortgage rates online to start. Keep in mind that the rate quote you see online is a starting point; 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 it isn’t important. The total interest you pay on over the life of the loan is a big figure, and a low rate can save you thousands of dollars.

» MORE: How to calculate your monthly mortgage payment.

4. Ask the right questions

Picking the right lender or broker to work with can be tricky. Narrow your choices by asking for 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?

Note: If you’re looking for low down-payment options, a loan backed by the Federal Housing Administration, Veterans Affairs or Department of Agriculture might be your best bets.

Also, check with your mortgage lender or broker if buying points to lower your rate makes sense. With this strategy, you’re basically paying some interest upfront in exchange for a lower rate on your mortgage. Generally, one point equals 1% of the loan amount. For example, on a $200,000 mortgage, 1 point would cost $2,000 and could lower your interest rate by 0.25%.

This might be a good cost-saving move if you plan on living in the home for a long time. “Even though you pay additional points upfront to do so, you can save thousands of dollars in interest expense over the life of your loan,” says James Dowd, a San Francisco-based financial advisor and accountant.

5. Read the fine print

Principal and interest payments on a mortgage aren’t the only costs of homeownership; you should ask your lender about other costs such as estimated closing costs, points, loan origination fees and transaction fees — and ask what each fee includes. If you are unsure of something, ask the lender for an explanation.

Some mortgage lenders will require an “earnest money” deposit to start the loan process. However, be wary of contracts specifying that the earnest money will be kept regardless of whether the lender offers a loan or the loan closes, says Kevin Stophel, a financial planner and advisor in Chattanooga, Tennessee. Ask the lender to specify under what circumstances the earnest money will be kept, and if the answer is vague, keep shopping around.

Don’t forget to examine the fine print of your loan documents, particularly the initial Loan Estimate and the Closing Disclosure. These will tell you the exact finance terms, who pays closing costs, what items are and aren’t included in the home, whether there’s a home inspection contingency, the closing date, and other important details.

Best mortgage lenders: summary

Lender
Best
for
Highlights
Key loan types
Minimum credit score*
Get started
Quicken Loans
First-time homebuyers
Low down payments; top FHA lender
Fixed and ARM;
Jumbo, FHA, VA
620
Rocket Mortgage
Online
Simple and fast online application
Fixed and ARM;
FHA, VA
620
Wells Fargo
wf-app
First-time homebuyers
+
Face-to-face
Low down payments; many loan types
Fixed and ARM;
HELOC, jumbo, FHA, VA, USDA
620
Chase
chase-logo
Refinancing
Low refinance rates**; many loan types
Fixed and ARM;
Jumbo, FHA, VA and HARP
620
Lenda
lenda_logo
Refinancing
No origination fees or broker commissions
Fixed
640
Guaranteed Rate
guaranteedrate_logo_transparent
Online
Simple and fast online application
Fixed and ARM;
FHA, USDA, VA
620
Bank of America
Bank-Of-America-Logo
Face-to-face
Convenience with many ways to apply
Fixed and ARM;
FHA, VA, HELOC
620

* Minimum credit score on top loans; other loan types or factors may selectively influence  minimum credit score standards
** Based on NerdWallet Mortgage Rate Index, daily survey among major national lenders

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Deborah Kearns is a staff writer at NerdWallet, a personal finance website. Email: dkearns@nerdwallet.com. Twitter: @debbie_kearns.

Steve Nicastro is a staff writer at NerdWallet, a personal finance website. Email: Steven.N@nerdwallet.com. Twitter: @StevenNicastro.

This article was updated Aug. 2, 2016. It was originally published April 8, 2014.