Ratings Methodology for Mortgage Lenders

NerdWallet’s overall ratings for mortgage lenders are evaluated against four major categories. A raw score is produced for each of the following:

  • Variety of loan types.
  • Ease of application.
  • Rates and fees.
  • Rate transparency.

Data collection and review process

NerdWallet currently reviews more than 50 mortgage lenders, including the majority of the largest U.S. mortgage lenders by annual loan volume (measured among lenders with at least a 1% market share); lenders with significant online search volume; and those that specialize in serving various audiences across the country. Some of these lenders are NerdWallet partners, but this does not influence the review process.

We collect information from lenders and verify it through interviews and on lender websites. We also use the Home Mortgage Disclosure Act, or HMDA, for origination fee and average interest rate data.

Then, we rate the lenders on a scale of 1 to 5 on the following criteria: variety of loan types, ease of application, rates and fees, and rate transparency. Each category constitutes 25% of the lender’s overall score. These scores generate ratings from 1 star (poor) to 5 stars (excellent). An average score of 4.5 to 5 points earns 5 stars; an average score of 4 to 4.49 points earns 4.5 stars; an average score of 3.5 to 3.99 points earns 4 stars; and so on.

Information updates

NerdWallet maintains contact with lenders throughout the year, collecting information on a recurring basis. Lender offerings are updated as needed.

The review team

NerdWallet’s review team consists of a content management specialist, editors and writers who cover all aspects of the homeownership journey — from deciding to buy a home to shopping for one; finding the right mortgage and mortgage lender; owning a home; selling a home and more. Aside from NerdWallet, the review team’s work has been published by outlets including MarketWatch, MSN Money, Newsweek, USA Today, The Washington Post, Yahoo and The Associated Press. Each content management specialist, editor and writer adheres to NerdWallet’s stringent editorial integrity guidelines.

Variety of loan types

NerdWallet looks for five home loan types from any given lender:

  • Purchase.
  • Refinance.
  • Fixed.
  • Adjustable.
  • Home Equity Loan (HEL), Home Equity Line of Credit (HELOC) or renovation mortgages.
Lenders get credit for each loan type offered. The more loan types a lender offers, the better the score, as it means more options for consumers.

Ease of application

We judge ease of application by multiple factors, such as the ability to track where an application is in the approval process and whether the website is device-responsive. The more intuitive and consumer-friendly the site’s features, the better a lender will score.

Rates and fees

Rates and fees are the two factors that affect a loan's total cost. NerdWallet reviews the latest available federal data and synthesizes a combined score for average interest rate and origination fee. A high average interest rate score indicates rates that approach the best in the market. A high origination fee score indicates some of the lowest recorded fees.

Rate transparency

NerdWallet looks at mortgage rate transparency in terms of how visible and detailed this information is to consumers on a lender’s website. Is it readily available, or do consumers have to contact the lender for customized rates? For instance, a lender may receive a low rating from us if they display a single loan type’s rate and nothing else (essentially bare-bones information). On the other hand, a lender may receive a higher score if they provide consumers with rates for multiple loan types and products, as well as important fee information like APR.

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