LenderFi Mortgage Review 2022

LenderFi at a glance

LenderFi is an online-only mortgage lender that offers purchase and refinance loans in 45 states and Washington, D.C. The nonbank lender, headquartered in Calabasas, California, was founded in 2006. It markets itself to customers seeking competitive rates, quick loan decisions, minimal paperwork and a fast closing. LenderFi offers most common loan types and products, but not home equity loans or niche loan types like renovation loans.

Here's a breakdown of LenderFi's overall score:

• Variety of loan types: 4 of 5 stars

• Ease of application: 5 of 5 stars

• Rates and fees: 5 of 5 stars

• Rate transparency: 5 of 5 stars

» MORE: Compare LenderFi with other mortgage lenders

LenderFi mortgage loan types

Borrowers may choose from fixed-rate and adjustable-rate mortgages of various terms, for both purchase and refinance.

While LenderFi offers mortgages insured by the Federal Housing Administration, it doesn’t consider them a priority, a representative said. It doesn't offer USDA loans.

LenderFi has suspended VA loans due to the COVID-19 pandemic but plans to reintroduce those types of mortgages when feasible, says LenderFi president Ryan Scholer.

Outside of government-backed loans, LenderFi’s main low-down-payment option is the Fannie Mae HomeReady conventional mortgage, which allows down payments as low as 3% with discounted private mortgage insurance.

Borrowers may get LenderFi loans on primary residences, and vacation and second homes. It doesn't lend for co-ops, and doesn't offer construction loans or renovation mortgages. Home equity loans and lines of credit are not available.

LenderFi mortgages are available in most states and in Washington, D.C., but not in Hawaii, Missouri, Nevada, New York or Utah.

» MORE: How to refinance your mortgage

LenderFi ease of application

LenderFi's goal is for customers to be able to search rates, fill out a full mortgage application online, get an instant rate decision and request a rate lock, all in one sitting.

"My mantra is 'Paperwork is the enemy,' so I am always trying to utilize technology to remove paperwork from the equation," Scholer says. For many borrowers, LenderFi is able to collect pay stubs and information about assets electronically.

If the borrower's employment status, assets and income can be verified electronically and if the appraisal is waived, LenderFi can approve a loan application within minutes and the borrower can lock a rate and close quickly, Scholer says. He says borrowers may conduct the entire application process online, but most make a phone call at some point to ask questions.

When a home appraisal is necessary, LenderFi can issue a preapproval pending results of the appraisal. The borrower may download a commitment letter that can be shown to the seller or the seller's agent.

If the loan has preliminary approval, the borrower may lock the rate. Typically, rate locks are for 30 days, and there is no charge, Scholer says, adding that LenderFi strives to close all loans within 30 days of a completed application. Borrowers may review their loan status via an online dashboard.

Borrowers are assigned a loan officer who is the designated point person throughout the process, Scholer says, adding that the loan officers are expected to share their cellphone numbers with borrowers so they can be reached beyond the company's regular phone hours of 8 a.m. to 6 p.m. Pacific Time, Monday through Friday.

Loan officers will communicate by office phone, mobile phone call, text or email, whichever the borrower prefers.

LenderFi mortgage rates and fees

One of the most important considerations when choosing a mortgage lender is understanding what the loan will cost. In order to provide consumers with a general sense of what a lender might charge, NerdWallet scores lenders on two factors regarding fees and mortgage rates, according to the most recently available Home Mortgage Disclosure Act data:

• LenderFi earns 5 of 5 stars for average origination fee.

• LenderFi earns 5 of 5 stars for offered mortgage rates compared with the best available rates on comparable loans.

Borrowers should consider the balance between lender fees and mortgage rates. While it's not always the case, paying upfront fees can lower your mortgage interest rate. Some lenders will charge higher upfront fees to lower their advertised interest rate and make it more attractive. Some lenders just charge higher upfront fees.

You can decide to buy discount points — a fee paid with your closing costs — to reduce your mortgage rate.

Deciding whether to pay higher upfront fees is a matter of considering how long you plan to live in your home and how much cash you have to apply toward closing costs when you sign the loan paperwork.

» MORE: 'Should I buy points?' calculator

LenderFi mortgage rate transparency

Mortgage shoppers may view customized rates for various loan types after inputting their ZIP code, price, down payment and credit score range. It isn't necessary to provide your name or contact information.

The resulting page frequently shows dozens of combinations of loan types, interest rates and points. By clicking "Show details," rate-shoppers may see an itemized list of closing costs, including discount points and third-party fees.

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