5 Tips for Finding the Best Mortgage Lender
Before house hunting, shop around for the best mortgage lenders. Get tips on finding the right lender for you, and see our top picks for a variety of needs.
Some or all of the mortgage lenders featured on our site are advertising partners of NerdWallet, but this does not influence our evaluations, lender star ratings or the order in which lenders are listed on the page. Our opinions are our own. Here is a list of our partners.
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, so it’s smart to shop around to find the best mortgage lenders out there.
How to look for a lender Mortgage lenders vary by the types of home loans they offer and the rates and fees they charge.
Before shopping for lenders, get your finances in order and learn about the different types of mortgages. Then compare lenders that offer the products and services you need.
Here are five tips to help you find the best mortgage lender. (See expanded explanations of our tips following the list of lenders.)
Get your finances in shape. A good credit score and a low debt-to-income ratio will help you qualify for the best mortgage rates.
Learn what kind of mortgage is right for you. A variety of mortgages are available. Understand the options, and look for lenders that offer what you need.
Compare rates from multiple mortgage lenders. You can search for the best mortgage rates online.
Get preapproved for a mortgage. Show sellers and real estate agents that you're a serious buyer by getting preapproved.
Compare loan estimates from at least three lenders. The loan estimate spells out the loan terms, and it estimates the monthly payment, fees and closing costs.
NerdWallet has researched some of the best mortgage lenders to help narrow your choices.
5 Tips for Finding the Best Mortgage Lender
Lender ▾ ▾ | NerdWallet Rating ▾ ▾ | Min. credit score ▾ ▾ | Min. down payment ▾ ▾ | Learn more |
|---|---|---|---|---|
5.0 /5 | 620 | 3% | Learn moreat Better at Better | |
5.0 /5 | 620 | 3% | Learn moreat Guaranteed Rate at Guaranteed Rate | |
5.0 /5 | 620 | 3% | Learn moreat NBKC at NBKC | |
5.0 /5 | 620 | 3% | ||
5.0 /5 | 620 | 5% |
- Offers a program allowing qualifying buyers to make cash offers.
- Makes it easy to see customized mortgage rates.
- Average interest rates are on the low end compared to other lenders, according to the latest federal data.
- Doesn’t offer USDA loans.
- VA loans are not available in every state.
- Doesn't offer home equity loans.
- Displays detailed sample rates for many of its loan products.
- Offers a wide variety of loans, including jumbo and interest-only products.
- Offers low rates compared with other lenders, according to the latest federal data.
- Doesn't offer home equity loans.
- Offers government-backed loans and some harder-to-find products, such as construction loans and specialty mortgages for pilots.
- Offers low rates and fees compared with other lenders, according to the latest federal data.
- Displays customized rates, with fee estimates, without requiring contact information.
- HELOCs and construction-to-permanent loans are available only in the Kansas City metro area.
- Posts current mortgage rates on its website.
- Offers several affordable loan options, including FHA, VA, USDA and the PNC Community Loan.
- Receives high marks for customer satisfaction, according to J.D. Power and Zillow.
- Doesn't offer renovation mortgages.
- In-person service is not available in every state.
San Diego County Credit Union: NMLS#580585
5%
Regional
- Offers purchase, refinance and jumbo mortgages, plus loans for second homes and home equity products.
- Provides customized rate and fee quotes without requiring contact information.
- No FHA, VA or USDA mortgages.
- Loans are available only in California.
- Low- or no-down-payment options with no mortgage insurance.
- Offers a home equity line of credit, or HELOC.
- Mortgages are available for non-warrantable condominiums.
- Doesn't offer government-backed mortgages, like FHA or VA loans.
- Mortgage origination fees are on the high side, according to the latest federal data.
- Offers multiple low-down-payment loan programs.
- May consider alternative credit data, such as bank statements.
- You can view customized rates for purchasing a home and apply online.
- Doesn't offer home equity lines of credit.
- Lender fees are on the high side, according to the latest federal data.
- Offers a wide range of loan types and products, including FHA, VA and USDA.
- Borrowers can apply and track loan status online.
- Offers customized online rate quotes with monthly payment estimates, including mortgage insurance, when applicable.
- Home equity loans are geographically limited.
- Origination fees are on the high side compared with other lenders, according to the latest federal data.
- Offers a variety of purchase and refinance loans, including jumbo mortgages.
- Has a preferred real estate agent program that can save a borrower money on closing costs.
- Offers some flexibility on guidelines for loan qualification.
- Does not offer VA or USDA loans.
- Products available only to California residents.
- Offers a wide range of affordable mortgage products, including 0% down payment loans, designed for military members.
- Offers HELOCs and home equity loans.
- Offers low rates compared with most lenders, according to the latest federal data.
- Website does not provide customized mortgage rates based on credit score or other factors before you apply.
- Credit union membership is limited to veterans and current military members, their families, and certain federal employees, retirees and contractors.
- Offers a wide variety of purchase and refinance mortgages with an emphasis on helping underserved communities.
- Its home equity line of credit can be used for an owner-occupied or second home.
- Offers a program to enable buyers to make cash offers.
- Mortgage origination fees tend to be on the high end, according to the latest federal data.
5 tips for finding the best mortgage lenders
Here are five tips to find the best lender for you.
1. Get your finances in good shape
The credit score required to get a mortgage varies by the type of loan and the lender. With a higher score, you'll have more choices of loan programs and you'll qualify for lower interest rates.
Before shopping for lenders, find out your credit score and make sure your credit reports are accurate. NerdWallet offers a free credit score and report, updated weekly, using TransUnion data.
You can receive free copies of your reports from each of the three major credit bureaus through the government-mandated AnnualCreditReport.com website. Check the reports carefully, and dispute any errors.
Next, work on improving your credit. Pay bills on time, and work on paying off credit card balances. Lowering your debt will also improve your debt-to-income ratio, or DTI, another key element that lenders evaluate. An ideal DTI ratio for a mortgage is under 36%. Reducing your debt payments will also free up money to save for a home down payment.
2. Learn what kind of mortgage is right for you
A variety of home loans are available to satisfy different needs. For example:
VA loans can help active and veteran military members and USDA loans are available for rural homebuyers. Neither require a down payment.
FHA loans have lower credit score requirements than other mortgages and require as little as 3.5% down.
Conventional loans are generally geared to borrowers with good credit, and some require as little as 3% down.
Jumbo loans are used to finance properties that are too expensive for most conventional loans.
Home loans also vary by term length, such as 15 or 30 years, and by how the interest rate works. With fixed-rate mortgages, the interest rate stays the same for the entire loan term; with an adjustable-rate mortgage, the interest rate periodically increases or decreases, after an initial fixed-rate period.
Some lenders offer a broad mix of mortgages; others specialize in certain types. Once you understand the general options, you can seek out the lenders that offer what you need.
3. Compare rates from multiple mortgage lenders
Search for the best mortgage rates online from lenders that offer the types of loans you want. Keep in mind that the rate quote you see is an estimate. A lender 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 from lenders, narrow the list to those with the lowest rates. The total interest you pay over the life of the loan is a big figure, and a lower rate can save you thousands of dollars.
» MORE: Use our mortgage calculator to find out your monthly mortgage payment.
4. Get preapproved
Apply for mortgage preapproval with more than one lender before you start shopping for a home. A mortgage preapproval letter shows sellers and real estate agents that you're a serious buyer. It's evidence that a lender has evaluated your finances and figured out how much you can afford to borrow.
Getting preapproved now will also save time later. When you're ready to make an offer on a home, lenders will have the information they need to process your home loan.
To get preapproved, you’ll have to provide information about your income, debts and assets. Lenders typically require:
Social Security numbers for yourself and any co-borrowers.
Savings, checking and investment account information.
Information about outstanding debt obligations, including credit card, car loan, student loan and other balances.
Two years of tax returns, W-2s and 1099s.
Salary and employer information.
Information about how large a down payment you can make and where the money is coming from.
5. Compare loan estimates and choose the best deal
A loan estimate is a document a lender must provide after you've applied for a loan and have provided certain information, including the address of the property you want to buy. The document will spell out important details about your loan, including the interest rate, monthly payment, fees and estimated closing costs.
Compare loan estimates from at least three lenders. Read each line to make sure the details match what you expected, and ask questions about anything you don't understand. Then carefully compare costs and terms to choose the best deal for you.
» MORE FOR CANADIAN READERS: How to choose a mortgage lender
More from NerdWallet
Last updated on May 1, 2023
Methodology
NerdWallet's content team selected its list of lenders based on the following methodology:
NerdWallet's star ratings for mortgage lenders are awarded based on our evaluation of the products and services each lender offers to consumers who are actively shopping for the best mortgage. The four key areas we evaluated include the variety of loan types offered, ease of application, mortgage rate transparency, and our analysis of the rates and fees lenders reported in the latest available Home Mortgage Disclosure Act data. The highest-scoring lenders in our overall star ratings rubric appear on this page. To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.
NerdWallet's 5 Tips for Finding the Best Mortgage Lender
- Better: Best for refinancing
- Guaranteed Rate: Best for FHA loans
- NBKC: Best for overall mortgage experience
- PNC: Best for jumbo loans
- San Diego County Credit Union: Best for credit union lending
- Alliant: Best for adjustable-rate mortgages
- Carrington: Best for low credit score borrowers
- Flagstar: Best for refinancing
- Golden 1 Credit Union: Best for cash-out refinancing
- Navy Federal: Best for VA loans
- New American Funding: Best for nontraditional credit histories
