Best Mortgage Lenders

Buying a home can be thrilling when you have the best mortgage lender by your side. It can help you get the most competitive rates and ensure a smooth and stress-free experience from application to closing. 

But how do you know which mortgage company is best for you? The LendEDU team has researched and found the five best mortgage lenders. Below, you can compare what makes each lender unique, their pros and cons, and which might be right for you. 

Reviews of the best mortgage companies

SoFi, Rocket Mortgage, Quicken Loans, and Navy Federal Credit Union are the best mortgage lenders, according to our research. 

To compare your options, we break down each company’s pros and cons below. We’ll also tell you what makes each company unique and what type of homebuyer it might be best for. 

• Best close-on-time guarantee: SoFi
• Best mortgage options: Rocket Mortgage
• Best for custom terms: Quicken Loans
• Best for military members: Navy Federal Credit Union

SoFi

Rocket Mortgage

Quicken Loans

Navy Federal

What types of mortgages do top mortgage lenders offer?

There are several types of mortgages you may qualify for based on your situation: 

Mortgage type	Best for
Conventional	Borrowers with good credit & down payment of at least 3%
Jumbo	Borrowers looking to finance high-priced homes over the conforming loan limits
FHA	First-time and low-income homebuyers with limited down payment funds
USDA	Low-to-moderate-income borrowers in rural areas
VA	Military members, veterans, and eligible surviving spouses

Conventional mortgages

Conventional mortgages are your standard, run-of-the-mill home loan. These are best suited to borrowers with credit scores above 620 and sufficient savings to fund a minimum 3% down payment.

Conventional loans are often processed and funded faster than government-backed loans despite their stricter eligibility requirements.

Jumbo loans

Got your eyes set on a high-priced home? Jumbo loans may be your best bet. You can purchase a home that exceeds conforming loan limits with a jumbo loan. These limits are usually $766,550 but can reach $1,149,825 in some areas.

Because of the amount of debt you assume with jumbo loans, you’ll often need a higher credit score, larger down payment, and more sizable cash reserves to qualify.

FHA loans

Federal Housing Authority (FHA) loans are often associated with first-home homebuyers, but anyone purchasing a primary residence can qualify for an FHA loan.

FHA lenders accept credit scores as low as 500, provided you can put 10% down. If your score is at least 580, your required minimum down payment shrinks to just 3.5%. But remember that FHA loans come with mortgage insurance—sometimes for the life of your loan.

USDA loans

Guaranteed by the U.S. Department of Agriculture, USDA loans offer a no-down-payment way to purchase rural real estate. They have 30-year terms, fixed interest rates, and no hard-and-fast credit score requirements.

To qualify, your annual earnings must be less than 115% of the median income in the county where you’re looking to buy. Your home must also be in a designated rural area.

VA loans

If you’re a current or former armed forces member, a Veterans Affairs-backed mortgage could be your ticket to homeownership. 

VA loans don’t require any money down and have a reputation for competitive interest rates. You will pay a funding fee of 1.25% to 2.15% for your first VA mortgage. If you take out a subsequent VA loan, your funding fee could increase to 3.3%.

How to qualify for a mortgage

You’ll usually need to meet these eligibility requirements to qualify for a mortgage. But keep in mind each lender sets its own requirements, so these are general guidelines. 

Factor	What is it?	Req.
Credit score	A three-digit number indicating how likely you are to repay your loan; tracked by the three credit bureaus: Experian, TransUnion, and Equifax.	620 or higher
Debt-to-income ratio (DTI)	The percentage of your monthly income going toward debt payments; calculated by adding your monthly debt payments and dividing it by your pretax (gross) monthly income.	Below 43%
Down payment	The upfront amount you pay toward purchasing a home	0% – 10% depending on loan type
Stable monthly income	You must show proof of steady income so the lender knows you can afford your monthly payments	A typical requirement is at least 2 years of income history

You can boost your chances of getting approved for a mortgage with these tips: 

• Pay bills on time, reduce debt, and correct errors on your credit report to raise your credit score.
• Save up for a larger down payment to lower your loan-to-value ratio and potentially avoid private mortgage insurance (PMI).
• Lower your DTI by paying down debts or increasing your income by asking for a raise, looking for a higher-paying job, or starting a side job.
• Keep a reliable job with consistent paychecks for at least two years.

How to get the best mortgage rates

Getting the best mortgage rates means you’ll pay less to purchase your house over time. You can score the most competitive rates by knowing what factors affect your rate:

• Credit score. A higher credit score can qualify you for lower interest rates.
• Down payment. Putting more money down can often lead to a lower rate.
• Loan term. Shorter loan terms (15 years) generally have lower rates than longer terms (30 years).
• Loan type. Government-backed loans, including FHA, USDA, and VA, may offer lower rates than conventional loans.
• Market conditions. Mortgage rates can fluctuate based on the federal funds rate, inflation, and other economic factors.

Our expert’s advice on 20% down payments

Erin Kinkade

CFP®

If you have the means to make a 20% down payment, it makes sense to do so. It will lower your mortgage balance and can result in a lower interest rate, lessening the amount of interest you pay. However, given the current prices of homes, such a large down payment might be unrealistic. It depends on each person’s financial circumstances and goals. If you’re a first-time homebuyer, you qualify for the VA loan, or you have other special criteria that allow for a lower down payment, I recommend—specifically if it’s what fits their budget while allowing room for savings for home repairs and other homeownership costs. The pros of a lower down payment may outweigh the cons; it depends on what works for each individual.

The type of interest rate you select for your mortgage can also affect your rate. You have two choices: fixed-rate mortgages and adjustable-rate mortgages. 

Here are the differences.

Fixed rates	Adjustable-rate mortgage (ARM)
Rate stays the same forever	Rates fluctuate based on market conditions
Monthly payment amount doesn’t change	Monthly payments can change
Best if you plan to stay in your home long-term or prefer predictable payments	Best if you plan to sell or refinance within a few years or are comfortable with potential payment changes
Rates may start out higher than ARM rates	Rates may start out lower than fixed rates

Regardless of the type of interest you choose, you can get the lowest rate with these tips: 

• Save up for a larger down payment to qualify for lower rates.
• Compare loan options from multiple lenders, so you know you’re getting the best terms.
• Buy discount points to lower your interest rate.
• Time your mortgage application when market rates are lower, if possible.

Our expert’s advice on a fixed-rate vs. adjustable-rate mortgage

Erin Kinkade

CFP®

In a high-rate environment, such as the one in July 2024, If you can afford a higher interest rate without burdening your cash flow, a variable rate can make sense because we expect rates to fall in the near future. However, that’s a gamble. I also suggest having a stable income that doesn’t fluctuate before accepting an adjustable-rate mortgage.

Additional mortgage costs to know about

Your monthly mortgage payment isn’t your only cost when you’re a homeowner. You may also need to factor these extra expenses into your budget: 

• Private mortgage insurance (PMI). If your down payment is less than 20%, you may be required to pay PMI. This protects the lender if you default. You pay PMI as part of your monthly mortgage payment, and it can cost 0.5% to 6% of your loan amount per year. You can often roll these payments into your mortgage.
• Property taxes. You pay property taxes to your local government. The amount varies based on your location and home value. These taxes may be rolled into your mortgage payment and held in an escrow account, or you may need to pay them separately each year. Use a property tax calculator to estimate your costs.
• Homeowners Association (HOA) fees. If you buy a home with an HOA, you’ll likely need to pay monthly, quarterly, or annual dues. These fees are paid to maintain common areas or provide certain amenities and are often separate from your mortgage payments.
• Homeowners insurance. Lenders require homeowners insurance to protect your property against damages or losses. Annual home insurance costs are projected to be $2,522 on average in 2024. But in disaster-prone areas—Florida, for example—the average is $11,759. You can often include your insurance premiums in your monthly mortgage payments.
• Closing costs. You’ll pay closing costs when you sign your mortgage documents and get your keys. This amount is often 2% to 5%, including appraisal fees, title insurance, and origination fees.

What percentage of your budget should your housing costs be?

A rule of thumb is to keep your total monthly housing expenses (including taxes, insurance, and HOA fees) below 28% of your gross monthly income.

If you’re considering a $500,000 home with a 10% down payment and a 30-year fixed-rate mortgage at 7.5% interest, your additional costs might look like this:

• PMI: $250/month
• Property taxes: $500/month
• HOA fees: $100/month
• Homeowners insurance: $200/month
• Closing costs: $15,000 (3% of the loan amount)

In this scenario, your monthly principal and interest payment would be $3,150. When you add in the additional costs (excluding closing costs), your total monthly housing expense would be $4,200. Following the 28% rule, you’d need a gross monthly income of $15,000 to comfortably afford this property.

These numbers are for illustration purposes only.

Which best-rated mortgage company is right for you?

Every mortgage lender is best for a certain type of homebuyer. Some are best for borrowers with bad credit, and others stand out for excellent customer service or a variety of loan options. So, how do you know which is right for you? 

First, make sure you meet the lender’s minimum credit score, DTI, and other criteria. But beyond this, consider these factors: 

• Interest rates. Compare rates from multiple lenders to see which gives you the lowest rate based on your credit profile. All the lenders on our list offer competitive rates.
• Fees. Choose a lender with transparent rates and fees so you won’t find unexpected charges buried in a list of fine print.
• Loan options. What type of mortgage do you need? Conventional? FHA? VA? Jumbo loans? Ensure your selected lender offers the type of mortgage you need.
• Online vs. in-person. Decide whether you prefer an online experience or value in-person help at a local branch. Better and SoFi are fantastic options if you’re comfortable applying and managing your mortgage online. Bank of America and loanDepot have plenty of offices for in-person service.
• Benefits. Some lenders offer more than just mortgage loans. For example, SoFi provides free financial planning to its members, and Bank of America offers a Preferred Rewards program. If these matter to you, seek them out.

How to apply for a mortgage

It can sometimes take 30 to 45 days to apply for and close on a home loan. Taking it one step at a time can make the process easier.

1. Gather your documents. Before you dive into the application process, have these documents ready: proof of income (pay stubs, W2s, tax returns), bank statements, assets, and debts.
2. Check your credit. Review your credit score and fix any errors that could be dragging it down. If your score isn’t as high as you’d like, look for areas of improvement. For instance, paying down balances can lower your credit utilization and boost your score.
3. Get prequalified or preapproved. Prequalification requires basic financial information in exchange for an estimate of how much you might be able to borrow. Preapproval is more thorough. It involves a credit check and results in conditional approval from a lender for a specific loan amount. Preapproval helps if you’re a serious buyer.
4. Submit your application. Once you’ve gotten prequalified or preapproved with various lenders, it’s time to submit a mortgage application with your top choice. Your lender will guide you through this process and let you know whether it needs additional documentation.
5. Wait for a loan decision. Your lender may take a few weeks to review your application and assess your eligibility for a home loan. Be patient, and respond to any additional requests right away. 
6. Close on your new home. Once you’re approved, you can review your loan estimate, terms, and costs. Then, you’ll pay your closing costs and get your keys.

Tips for managing your mortgage

You’ll often pay your mortgage to your lender or its designated loan servicer. Stay on top of your mortgage payments with these tips:

• Make your payments on time. Your lender will tell you where to send payments and when they’re due. Set up automatic payments to avoid missing payments or paying late (both of which can affect your credit score). 
• Budget for related expenses. In addition to your mortgage payments, you may owe for property taxes, home insurance, maintenance, and repairs. Some of these costs may be rolled into your mortgage, and some may not.
• Build an emergency fund. Create a dedicated savings account for extra home expenses outside your monthly payment. This savings fund can also help you stay on top of mortgage payments if you lose your job. 
• Monitor interest rates. If you bought your house when interest rates were high, you may save money by refinancing when interest rates dip again. 
• Consider extra payments. If your budget allows, making extra payments toward your principal loan amount can help you pay off your mortgage faster.

FAQ 

How long does the mortgage application process take?

Expect to close on your mortgage within 30 to 60 days of applying. Depending on your lender, you can get preapproved in a matter of minutes or days. From there, you’ll start shopping for homes. Once you find one you like, you can make an offer.

Most sellers respond to offers in 48 hours or less. If yours is accepted, you’ll begin the full underwriting and appraisal process. This phase is often the longest, but if all goes well, you’ll have the keys to your home three to four weeks later.

Can I refinance my mortgage in the future?

In most cases, you can refinance your mortgage after six to 12 months of on-time payments. Refinancing could let you lower your interest rate, tap into your home equity, or convert an adjustable-rate mortgage to a fixed rate. 

Refinancing can also restart your loan term, and it may not be cheap. Before refinancing, consider the potential impact on your long-term borrowing cost and whether you can afford another round of appraisal fees and closing costs.

Who has the best mortgage rates? 

The best mortgage rates can vary based on factors including your credit score, loan amount, and term length. Online mortgage lenders, credit unions, and large national banks may offer competitive rates. To find the best rates, it’s important to shop around and compare offers from multiple lenders, including local banks and mortgage brokers.

Where is the best place to get a mortgage? 

The best place to get a mortgage depends on your individual needs and preferences. Online lenders may offer convenience and competitive rates. Credit unions may provide personalized service and favorable terms for members. Traditional banks and mortgage brokers are also reliable options, providing a range of products and in-person assistance. It’s crucial to compare rates, terms, and customer service across different types of lenders to determine the best fit for you.

Is it better to get a mortgage from a bank or a lender? 

Whether it’s better to get a mortgage from a bank or a lender depends on your specific situation. Banks may offer a wider range of financial products and can provide a more comprehensive banking relationship. Mortgage lenders, including online lenders, may offer more specialized services and competitive rates. It’s beneficial to consider the pros and cons of each and choose the one that aligns with your financial goals and preferences.

Are mortgage rates better with credit unions? 

Mortgage rates may be better with credit unions due to their not-for-profit status, which allows them to offer competitive rates and lower fees. Credit unions also tend to provide personalized service and flexible terms. However, rates can vary, so it’s essential to compare offers from multiple sources, including banks and online lenders, to ensure you’re getting the best deal.

Does a higher credit score help with mortgage rates? 

Yes, a higher credit score generally helps secure better mortgage rates. Lenders view a higher credit score as an indication of lower risk, which can result in lower interest rates and more favorable loan terms. Improving your credit score before applying for a mortgage can lower the cost of your loan over time.

How we selected the best mortgage lenders 

Since 2015, LendEDU has evaluated mortgage lenders to help readers find the best mortgages. Our latest analysis reviewed several data points from lenders and financial institutions. This information is gathered from company websites, online applications, public disclosures, customer reviews, and direct communication with company representatives.

These data points are organized into broader categories, which our editorial team weights and scores based on their relative importance to readers. These star ratings help us determine which companies are best for different situations. We don’t believe two companies can be the best for the same purpose, so we only show each best-for designation once.

Higher star ratings are ultimately awarded to companies that create an excellent borrower experience. This includes offering the ability to prequalify, competitive interest, flexible loan amounts, and unique benefits that support borrowers throughout repayment.

Recap of the best mortgage lenders