Best Mortgage Lenders of April 2024

Rocket Mortgage offers the best mortgage loans

Fact checked by Betsy PetrickReviewed by Andy Smith

Buying a home is one of the hardest—and most expensive—decisions you’ll ever make. And since most borrowers need to take out a mortgage, finding a lender can be equally challenging. 

We know how overwhelming it can be to choose a mortgage lender to buy your house, so we researched 45 leading companies and identified the five best mortgage lenders based on their loan options, rates, customer service, and typical time to close a loan, along with other important factors.

Important

Mortgage lending discrimination is illegal. If you think you’ve been discriminated against based on race, religion, sex, marital status, use of public assistance, national origin, disability, or age, there are steps you can take. One such step is to file a report to the Consumer Financial Protection Bureau (CFPB) and/or with the U.S. Department of Housing and Urban Development (HUD). 

Best Overall: Rocket Mortgage (Quicken Loans)

• Online application: Yes
• Loan types: Conventional, FHA, Jumbo, VA
• Days to closing: Normally 30 to 45 days

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Pros

• Highly rated for customer service

• Digital application process 

• Quick closing time

Cons

• Does not offer USDA loans

• May have higher fees than other lenders

Why We Chose It

Rocket Mortgage is our choice as the best overall mortgage lender because of its high customer satisfaction ratings, its mortgage options, and its convenient online application process. 

J.D. Power ranked Rocket second in its 2023 U.S. Mortgage Origination Satisfaction Study. Furthermore, Rocket ranked first in the J.D. Power 2023 U.S. Mortgage Servicer Satisfaction Study. Rocket’s consistent high rankings in studies such as these show its commitment to customer satisfaction and creating a great experience for home buyers.

Rocket Mortgage has several mortgage options, including conventional loans and jumbo loans. It’s also a provider of government-backed loans, like FHA and VA mortgages. 

In general, borrowers need a credit score of 620 or higher to qualify for a conventional loan, but borrowers with lower scores can get a Rocket FHA loan. Rocket says mortgages normally close in between 30 and 45 days, but there is variation in some cases. Overall, they are known to get things done in an efficient manner.

Although Rocket Mortgage could be a convenient option for many home buyers, the lender doesn’t offer USDA loans, and its fees may be higher than you’d get from other lenders. Rocket doesn’t disclose its fees on its website, and a company representative told us fees can vary based on the loan structure.

Best for First-Time Homebuyers: Fairway Mortgage

• Online application: Yes
• Loan types: Conventional, FHA, Jumbo, Renovation, Reverse, USDA, VA, Physician
• Days to closing: 30–45 days

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Pros

• Offers FHA and low down payment loans

• Personalized credit improvement plans

• Offers mortgage options specifically for physicians

Cons

• No rates advertised on website

Why We Chose It

Fairway is a national mortgage lender that offers multiple mortgage products. Fairway can be especially helpful for first-time homebuyers since the lender offers FHA loans as well as conventional loans with a minimum down payment of as low as just 3%. 

Borrowers can also take advantage of Fairway’s Credit Tools program, where a Fairway team member will create a personalized credit improvement plan for you. You can boost your credit score over time, making it easier to qualify for a loan and get a lower interest rate.

The minimum credit score for a conventional loan is 620 and 500 for an FHA loan. In addition, a Fairway loan officer told us the minimum score for most loans is usually 620. FHA loans with 3.5% down require at least a 580 credit score. Borrowers with a credit score of 500 to 579 can still qualify but must put at least 10% down. Those with a credit score below 500 cannot qualify for FHA mortgages.

Fairway’s time to close loans is fairly typical at about 30 to 45 days. The company has robust educational resources to help new homebuyers make informed decisions.

Best Big Bank Lender: Bank of America

• Online application: Yes
• Loan types: Conventional, FHA, VA, Jumbo, Doctor
• Days to closing: Not disclosed

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Pros

• Relationship discounts

• Grants for moderate-income home buyers

• Borrowers can pre-qualify and apply online

Cons

• Limited information about fees

• Does not offer USDA loans

• Does not disclose average time to close

Important

In November 2023, Bank of America agreed to pay a $12 million fine to the Consumer Financial Protection Bureau for not asking mortgage applicants their race, ethnicity, and sex, and then saying the applicants didn’t provide that information. The government collects that info from lenders to identify potential patterns of discrimination in mortgage lending. The money from the fine paid will go to a victim compensation fund.

Why We Chose It

If you’re more comfortable working with a large bank than a smaller lender, Bank of America could be a good choice. If you’re a BofA customer or have a Merrill investment account, you could qualify for valuable interest rate discounts on your mortgage. 

Bank of America has several loan programs for borrowers with small down payments and less-than-perfect credit. Borrowers with low or moderate incomes could qualify for a mortgage with as little as 3% down and less expensive mortgage insurance. Plus, some borrowers may be eligible for grants that will help cover a portion of your closing costs or down payment. 

Bank of America doesn’t offer all types of government-backed loans. For example, borrowers looking for a USDA loan to purchase property in rural areas will have to work with other lenders. And Bank of America doesn’t disclose its average time to close or its lender fees. 

Bank of America is a multinational company that operates retail financial centers throughout the country.

Best for Bad Credit: Prosperity Home Mortgage

• Online application: Yes
• Loan types: Conventional, FHA, VA, Jumbo, USDA
• Days to closing: Not disclosed

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Pros

• Low down payment options

• Lower credit score minimum

Cons

• Not available in Hawaii and Iowa

• Doesn’t list its rates or fees online

Why We Chose It

Prosperity Home Mortgage is a useful option for borrowers with bad credit because of its low minimum credit score requirement and first-time homebuyer options. 

The company doesn’t disclose its minimum credit score online, but a company representative shared that its minimum for conventional loans is generally 600—a lower minimum than many other lenders require. And because it offers FHA loans, you should be able to get a mortgage even if your score is lower than that. 

Prosperity doesn’t list its terms online, so you need to submit an application or work with an agent to see its rates and fees. 

Struggling to get a mortgage with poor credit? See our picks for the best mortgage lenders for bad credit for some other options.

Final Verdict

Getting a mortgage used to be time-consuming and intensive. But with today’s technology, modern lenders like Rocket Mortgage make applying for a mortgage simple and straightforward. And you don’t have to sacrifice low rates and customer service for a streamlined application. From large banks to smaller niche lenders, getting a mortgage is easier than ever. 

Whether you have bad credit or want to apply for a mortgage online, there’s a range of options to choose from. Before selecting a company, compare rates and terms from the best mortgage lenders to find the best home loan.

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Guide for Choosing a Mortgage Lender

Should You Get a Mortgage?

If you’re thinking about buying a home, you’re probably wondering if you should get a mortgage. Here are some things to consider when making your decision:

• Your credit profile: Your credit score will affect the interest rate you’re offered on your mortgage, so it’s important to check your credit reports and score before applying for a loan. If you have good credit, you’re more likely to qualify for a lower interest rate, which can save you money over the life of your loan. But if your credit is in the poor to fair range, you may want to put off buying a home until you can improve your score. 
• Your debt-to-income ratio: Lenders will look at your debt-to-income ratio to determine how much of a mortgage you can afford. This is the amount of debt you have divided by your income. Most lenders prefer that your DTI not exceed 43%, but some may go as high as 55%. The lower your DTI, the easier it will be to afford your payments. If you have a substantial amount of debt, delaying buying a home until you pay down some debt may be a smart choice. 
• Your savings: In most cases, you’ll need a down payment of at least 3% of the home value to qualify for a mortgage. You’ll also need money to cover closing costs, and reserves of cash to show you can handle the payments. If your account balance is too small you could struggle to qualify for a loan, or you may be unable to handle any emergencies that pop up. 

What to Do Before Applying for a Mortgage

Before applying for a mortgage, there are a few things you should do to ensure you have the best chance of being approved for a loan.

First, check your credit reports at AnnualCreditReport.com. Lenders will review your credit to determine your eligibility for a loan and to set your interest rate, so look for any errors or issues that may be bringing your scores down. If you find any problems, you can dispute those errors with the credit bureaus. 

Also, consider how much house you can afford. You can use a mortgage calculator to see how your loan amount, interest rate, and repayment term affect your monthly payments. 

How to Compare Mortgage Lenders

When shopping for a loan, it’s important to compare mortgage lenders to ensure you’re getting the best deal. Key points to consider include: 

• APR: The Annual Percentage Rate (APR) is the cost of borrowing money, and it’s expressed as a percentage of the loan amount. It includes the interest rate as well as any fees that are charged by the lender.
• Down payment: This is the amount of money you’ll need to put down upfront in order to get the loan. The higher your down payment, the lower your monthly payments will be.
• Time to close: This is how long it will take to process and close your loan. Some lenders can do it in as little as 21 days, while others may take 45 days or more.
• Customer satisfaction: This is a measure of how satisfied customers are with their experience working with the lender. You can find customer satisfaction ratings on sites like J.D. Power and Trustpilot. 
• Credit score requirements: Most lenders have minimum credit score requirements, so it’s important to check what these are before you apply. If your credit score is on the low side, you may still be able to get a loan, but you’ll likely pay a higher interest rate.

How to Apply for a Mortgage

Once you choose a lender, you can apply for a mortgage. 

If you’re applying online, you’ll need to provide some personal information, such as your Social Security number, date of birth, and employment history. You’ll also need to supply financial information about your income, debt, and assets. The lender may ask for additional documentation, such as tax returns or bank statements.

Once you’ve submitted this information, the lender will run a credit check and verify your employment. The lender will review your application and credit to decide whether to approve you for a mortgage. If you’re approved, you’ll receive a loan estimate that outlines the terms of your loan, including the interest rate, monthly payment, and closing costs.

If you decide to move forward and purchase a particular home, you’ll need an appraisal and possibly a home inspection of the property. If everything looks good, the lender will work with you to set a closing date. At closing, you’ll sign the last of the paperwork, and you’ll officially be a homeowner.

What Is a Mortgage?

A mortgage is a type of secured loan that is used to purchase a home. The loan is secured by the property you buy, so the lender can foreclose on it if you default on the loan. Mortgages are typically paid back over a period of 15 or 30 years.

What Are the Different Types of Mortgages?

There are several different types of mortgages available to homebuyers. The type of mortgage you choose will depend on your financial situation and your goals for the loan.

The most common types of mortgages are:

• Fixed-rate mortgages: These loans have an interest rate that remains constant for the life of the loan. Your monthly payments will be the same every month, making it easy to budget for your mortgage payment.
• Adjustable-rate mortgages: These loans have an interest rate that can change over time. Your monthly payments may go up or down depending on market conditions.
• FHA loans: These loans are backed by the federal government and are available to homebuyers with low credit scores.
• VA loans: These loans are available to veterans and active military members.
• Jumbo loans: These loans are used to finance homes that are more expensive than the conforming loan limit.
• USDA loans: These loans are available to homebuyers in rural areas.

Can You Refinance a Mortgage?

If your credit improves or mortgage rates decrease, you may be wondering if you can refinance to take advantage of lower rates. Mortgage refinancing is possible, but the process can be intensive—similar to applying for the original mortgage—and may require you to pay closing costs. 

How Are Mortgage Interest Rates Determined?

Mortgage interest rates are determined by a number of factors, including the type of loan you choose, your credit score, and the current market conditions. You can shop around for the best mortgage interest rates by comparing offers from multiple lenders. Be sure to compare not only the interest rate but also the APR and terms and conditions of each loan, paying particular attention to any additional lender fees. 

Methodology

Our team evaluated 45 mortgage lenders and collected nearly 1,500 data points before selecting our top choices. We weighed 15 criteria and gave a higher weight to those with a more significant impact on potential borrowers. 

The top picks were selected based on factors like quality of service (weighted 50%), operational features (32%), loan types (12%), and accessibility (6%). We took into account important considerations like whether or not the lender offers jumbo loans, how many states the lender is licensed in, and what the overall customer experience is like.

We also conducted a survey of 1,195 people who have taken out mortgages. We asked about customer satisfaction with various mortgage lenders and learned which features are most important from a customer perspective. This information helped determine weights for criteria used for scoring.

Read more in our full mortgage lender methodology.

Read the original article on Investopedia.