Not all mortgages are created equal. Depending on the lender, fees can be higher and closing times longer. Some lenders focus on a speedy preapproval process, while others may offer discounts for military or existing customers. You can also use this useful mortgage calculator and get a rough idea about current rates.
Because these factors are essential to consider when choosing a lender, we compared dozens of lenders to come up with this comprehensive list of the best lenders for borrowers.
We considered four main categories: the borrower’s ability to get a loan, affordability, loan options, and speed to funding. Our goal is to make mortgage comparison shopping easier, whether you’re looking to buy a home or is wondering if 2023 will be a good time to refinance an existing mortgage.
Contents
Best Mortgage Lenders:
Chase:
| Pros | Cons |
| Low down payment loans available | The lender doesn’t offer USDA loans |
| Flexible credit and income requirements for certain loans | Home Lending Advisors are not available in Hawaii or Alaska |
| Discounts for existing customers and borrowers who complete a loan education course | Chase does not currently offer home equity loans, new HELOC applications are paused |
| Borrowers will receive $2,500 through the Chase Closing Guarantee if the closing date is missed. |
Flagstar Bank:
| Pros | Cons |
| Both online and branch locations (in a few states) are available | Branch locations aren’t available in every state |
| Low mortgage rates available | |
| Alternative data, such as utility and rent payments, are considered | |
| Low minimum credit score mortgages offered |
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Mr. Cooper
| Pros | Cons |
| Ample digital support for existing customers | The lender doesn’t offer home equity loans or HELOCs |
| Low minimum credit score requirements | The lender doesn’t offer USDA loans |
| Several discount programs are available | There are no brick-and-mortar locations |
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PNC Bank:
| Pros | Cons |
| Low minimum credit score requirements | Does not offer renovation loans |
| Fast preapproval time | |
| Online and in-person services available | |
| Several discount programs are available | |
| Ample digital support for existing customers |
Ally
| Pros | Cons |
| Loan preapproval takes just three minutes | The lender doesn’t offer FHA, VA or USDA loans |
| Alternative credit data, such as utility and rent payments, are considered in some cases | There are no brick-and-mortar locations |
| Borrowers can lock in their rate within minutes | Ally does not offer land loans |
| There are PMI-free loans for jumbo borrowers who put 10% down | |
| First-time homebuyers have the HomeReady Loan option available to them | |
| Ally customers will get a discount that is applied toward closing costs |
Bank of America:
| Pros | Cons |
| You can qualify for a no-PMI, low-down payment mortgage | The lender does not offer USDA loans |
| Alternative credit data, such as utility and rent payments, are considered | The preapproval letter takes 10 days to receive |
| Borrowers have the option to apply online or in person | |
| The bank offers several mortgage discount programs |
Better.com
| Pros | Cons |
| Loan verified preapproval time is as fast as 20 minutes | The lender doesn’t offer VA or USDA loans |
| Alternative credit data, such as utility and rent payments, are considered | There are no brick-and-mortar locations |
| There are no commission or lender fees | |
| Better.com offers a bridge loan program to tap home equity when purchasing a new home |
Guaranteed Rate
| Pros | Cons |
| Alternative credit data, such as utility and rent payments, are considered in some cases | Some other lenders have faster preapproval times |
| Operates in all 50 states | |
| Competitive interest rates | |
| No lender fees for VA loan borrowers |
What is a mortgage?
A mortgage is a type of loan that is used to purchase a property, such as a house or a piece of land. The property serves as collateral for the loan, which means that the lender can take possession of the property if the borrower is unable to repay the loan.
The borrower, also known as the mortgagee, typically makes monthly payments to the lender, also known as the mortgage holder, which includes both interest and principal payments. The interest is the cost of borrowing the money, while the principal is the amount of the loan that is being paid off.
Mortgages typically have a long term, usually 15 or 30 years, and are secured by the property being purchased. They usually require a down payment, which is a percentage of the purchase price that the borrower must pay upfront. This is typically between 3-20% of the purchase price, depending on the lender and the type of mortgage.
The interest rate for a mortgage can be fixed or adjustable, and the terms of the loan can vary depending on the type of mortgage. Some common types of mortgages include:
- Conventional mortgages, are not insured or guaranteed by the government.
- Government-backed mortgages, such as FHA, VA, and USDA mortgages, are insured or guaranteed by the government and may have more relaxed qualifying standards.
- Jumbo mortgages, are for higher loan amounts and may have stricter qualifying standards.