The Best Mortgage Companies
Rates are important, absolutely. But they're not the only thing that matters. We talked with realtors, kicked out any lenders with multiple regulatory actions, then got pre-approved eight times ourselves. The most helpful lenders with competitive rates made the cut.
Quicken Loans was the best through and through — an all-around lender with a wide range of available loan options, fair rates, a lot of learning tools, and great navigation on its website. Plus, we were in and out of its simple pre-approval process in less than half an hour.
Of course rates are going to matter on a home-sized loan. Even a fraction of a percentage point can easily mean tens of thousands of dollars over the course of a mortgage. But, our panel of experts reiterated again and again that you shouldn’t just pick the first low rate that comes along. The best mortgage companies are going to be able to get you a screaming deal, and also be available to help you close by a specific date — or give you advice on a Saturday morning. Our best overall, Quicken Loans, offered impressive customer service alongside a killer knowledge center, and we were pre-approved and ready to house hunt in less than 30 minutes.
How We Found the Best Mortgage Companies
We started with a list of 181 lenders, banks, and credit unions — and ditched the brokers.
Brokers are the companies that shop around for loans on your behalf. They’re essentially middlemen between the homeowner and the actual lender. For this review, we only looked at lenders that offered loans and rates directly.
Acceptance Capital Mortgage, Anchor Mortgage Company, Angel Oak Home Loans, Assurance Financial Group, Barry Slatt Mortgage, Charles Schwab Bank, Dovenmuehle Mortgage, FidelityFirst, Fulton Mortgage Company, Jmac Lending, Keystone Mortgage Company, LenderLive, New England Regional Mortgage, Peoples Mortgage Company, Plaza Home Mortgage, SecurityNational Mortgage Company, Valley Mortgage Company, Vantage Mortgage Group, Vermont Mortgage Company
We opted for widespread availability.
Being local isn’t a bad thing. It might even be a good thing (for you). Local lenders that only service a small area sometimes outshine the bigger guys in terms of hands-on care, especially for homebuyers with special circumstances — say you’re self-employed or have past credit problems.
Bruce Ailion, a realtor and attorney with Re/Max Town and Country put it this way: “The big players with 20 loan officers doing 1,500 loans a month do not need that kind of business. A local mortgage broker with four loan officers doing 100 loans a month will take the time to work with the borrower, earn their trust and respect, and hopefully their future business and referrals.”
If you’ve got a special circumstance or think you might want a little more hand-holding, we recommend checking your local mortgage options. To find the best nationwide, though, we wanted to find a lender that was available in at least 40 states. Sorry Bank of America; you might be too big to fail, but with mortgage offers in only 30-some states, you’re not big enough to recommend as a nationwide mortgage lender.
1st Rate Home Mortgage, Advisors Mortgage Group, Alaska USA Federal Credit Union, Allied Mortgage Group, America First Federal Credit Union, AmericanLoans, AmeriSouth Mortgage Company, AnnieMac Home Mortgage, Apex Home Loans, Arvest Bank, Associated Bank, Atlantic Home Loans, Aurora Financial, Bank of America, Barrons Mortgage Group, Bethpage Federal Credit Union, BMO Harris Bank, BNC National Bank, Boeing Employees Credit Union, Branch Banking and Trust Company, Cadence Bank, Capital One, Catalyst Lending, Cendera Funding, Central Mortgage Company, Century Mortgage Company, Christensen Financial, Circle Mortgage, Citizens Bank, Citizens Equity, First Credit Union, Coast 2 Coast Funding Group, Coastal Mortgage Corporation, Coastline Home Mortgage, Commerce Home Mortgage, Community Mortgage Funding, Compass Mortgage, CresCom Bank, Delta Community Credit Union, Digital Federal Credit Union, eRates Mortgage, ESL Federal Credit Union, F&B Acquisition Group, Fifth Third Bank, First Mortgage Company, First Technology Federal Credit Union, FirstCal, Franklin American Mortgage Corporation, Fremont Bank, Gateway Mortgage Group, GMFS, Gold Star Mortgage Financial Group, Group One Mortgage, GSF Mortgage Corp, Hallmark Home Mortgage, Happy State Bank, Highlands Residential Mortgage, Homeowners Financial Group, HomeServices Lending, Homestreet Bank, HSBC Bank USA, IAB Financial Bank, IBC Bank, Inlanta Mortgage, InterFirst Mortgage Company, International City Mortgage, Iserve Residential Lending, Jersey Mortgage Company, KS StateBank, Kwik Mortgage Corp, Leaderone Financial Corp, Legacy Group Capital, Lenda, Loan Simple, Manufacturers and Traders Trust Company, McLean Mortgage Corporation, Medallion Mortgage, Mid-America Mortgage, Monarch Bank and Mortgage, Mortgage Management Consultants, Mortgage Master, MUFG Union Bank, Nationwide Equities Corp, On Q Financial, Pacific Residential Mortgage, Paramount Bond & Mortgage, Pennsylvania State Employees Credit Union, Pentagon Federal Credit Union, Pike Creek Mortgage Services, Pinnacle Peak Lending, Pioneer Mortgage Company, PNC Bank, Poli Mortgage Group, Police & Fire Federal Credit Union, Provident Funding, Pulaski Bank, Randolph-Brooks Federal Credit Union, Rapid Mortgage Company, Regions Bank, Republic State Mortgage, San Diego County Credit Union, SchoolsFirst Federal Credit Union, Seattle Bank, Security Service Federal Credit Union, Semper Home Loans, SoFI, Southeast Mortgage, Spruce Mortgage, Star One Credit Union, State Employees Credit Union, State Street Bank and Trust Company, Suncoast Credit Union, SunTrust Bank, SunTrust Mortgage, SunWest Mortgage Company, TD Bank, Teachers Federal Credit Union, The Bank of New York Mellon, The Golden 1 Credit Union, TriStar Finance, U.S. Bank, Umpqua Bank, Universal American Mortgage Company, US Mortgages, Van Dyk Mortgage, Victorian Finance, VillageMortgage, VIP Mortgage Inc, Vitek Mortgage Group, Vystar Credit Union, W J Bradley Mortgage Capital, Wallick And Volk, Waterstone Mortgage, Weststar Mortgage, Winterwood Mortgage Group
We checked for regulatory actions and cut repeat offenders.
Mortgage companies are regulated by both state and federal agencies and whenever one of those agencies files an action against the company, that information is gathered and reported by the Nationwide Multistate Licensing System. Dun, dun, dunnnn.
Most infractions are administrative in nature. In one case, an inspector visited an Amerisave Mortgage Corporation office in Ohio and found the office was empty — no one actually worked there. Ohio law requires at least one physical office (staffed with people), so a complaint was filed.
In instances like these, the results can be simple: Amerisave stated the office had just relocated and it settled the case. But when the infractions pile up, it’s not just an administrative oversight; it’s a pattern. Lots of infractions mean there are more than a few unlawful things going on, like unlicensed loan agents who could sign you up for the wrong policy, or companies paying illegal quota incentives to loan officers to sign up as many mortgages as possible.
Amerisave Mortgage Corp, CrossCountry Mortgage, Home Point Financial, James B Nutter & Co, Prospect Mortgage, Sierra Pacific Mortgage
We evaluated each institution on how easy it was to get started.
Getting a mortgage isn’t cut and dry, but it shouldn’t be a slog either. The best lenders have more than just financing; they have the tools — and the people — to help walk you through the process.
That process is easiest when the company’s website is simple to navigate, when the rates are transparent and easy to find, and when you can apply online or over the phone. It’s even easier for beginners if the company has a knowledge center that can actually teach you something, plus ways to get help if you need it.
Citibank had it all. The website easily guided us through the home-buying process with helpful information on everything from different types of loans to how much we should save for a down payment. In the end, we were given the option to call in to apply, but a live chat window had already popped up with a loan officer ready and waiting to answer our questions.
Movement Mortgage was one of the worst. The sparse and somewhat difficult-to-navigate website made it easy to find the company’s mission statement, but impossible to locate current rates or info about FHA loans.
Consumer Direct (FirstBank), Embrace Home Loans, First Guaranty Mortgage, Guild Mortgage Company, Morgan Stanley Bank, Movement Mortgage, Nationstar Mortgage, Platinum Mortgage, Premia Mortgage, Sebonic Financial
Then we got pre-approved.
We went through the pre-approval process with the remaining mortgage companies looking for anything that would thrill us (or aggravate us) if these were our lenders.
The Application. Getting pre-approved doesn’t require the extensive paperwork or underwriting of actually getting a mortgage. It should be a smooth, easy process. Some lenders, like Chase Bank, didn’t keep it simple. It required information on the specific property you want to buy, including annual real estate taxes and hazard and flood insurance premiums — not helpful for anyone who just wants to know how much they can spend before they start shopping. To figure it all out, we had to search for our local tax rates before we could finish the application. On one contender, we couldn’t fill out the application at all: New Penn Financial had an error we couldn’t get past, no matter which browser we tried.
We were looking for an almost effortless pre-approval process, but companies like Chase asked us for details we weren’t expecting.
The Response. After we finished applying, we set our stopwatches and waited for a response. Most lenders replied within a few hours so we weren’t left hanging, but MB Financial oddly contacted us the next day to say our application was received and then ceased communication. We’re still waiting to hear if we’re pre-approved or not.
Once we got a response, we were critical of it too. Was it helpful or generic? Were the next steps clear or were we left wondering what to do? First Internet Bank impressed us the most: Its response popped up as soon as we hit submit. Quicken Loans was the runner up, providing a few helpful hints on getting approved right on the initial response email.
The Service. We knew we’d be aggravated by any company that didn’t have a quick (and helpful) answer to our questions, so we called to check on our application status and asked a few questions. We rated each company on its customer service hours, how long we waited on hold, and if we got the answers we needed.
Alliant Credit Union got us through to a loan officer immediately. When we asked how long the pre-approval was guaranteed, the loan officer sensed we might be first-time homebuyers and walked us through the entire pre-approval process in simple, human terms. On the other hand, eLend never even answered. We called during peak hours, but the phone rang and rang until we finally got a pre-recorded message that told us an error occurred. Same with Stonegate Mortgage — it never picked up the phone.
|Mortgage Company||Time Spent Waiting on Hold|
Alliant Credit Union
|Less than 5 minutes|
|More than 15, but less than 30|
|More than 5, but less that 15|
|We're still waiting|
First Internet Bank
|Less than 5 minutes|
New American Funding
|Less than 5 minutes|
|Less than 5 minutes|
Chase Bank USA, eLend, MB Financial Bank, New Penn Financial, Stonegate Mortgage
We looked for low rates and fees.
While cost isn’t the only thing that matters, it definitely is important. When you’re applying for a mortgage — or even looking to refinance — you’ll be paying closing costs, points, interest, and fees. We used a standardized quote to compare our remaining contenders to reach our final five picks.
At the time of testing, the average interest rate among the remaining contenders was 3.729 percent. Two mortgage companies had higher-than-average rates: Wells Fargo was the highest at 4 percent and LoanDepot was second highest at 3.875 percent. LoanDepot also had the highest estimated monthly payment of any of the companies.
The spread of 0.375 percentage point between the highest and lowest rates may not seem like a big difference up front, but costs will definitely add up over time. A 30-year, $350,000 loan through Wells Fargo at 4 percent would end up costing $601,543 — not even factoring in closing costs, homeowner’s insurance, and other fees. If you got the same $350,000 loan at 3.625 percent from one of our top picks, you’d end up paying around $574,624. That’s a difference of $26,919.
So why wasn’t cost the most important factor?
What you’re paying matters, absolutely. And we did cut the companies with the highest rates. But in the world of real estate, those rates can vary widely and are dependent on the individual. Factors like your location, credit score, down payment, and how much you’re borrowing can all affect what you’ll pay in the end.
“The level of difficulty in preparing a loan for a particular buyer can make a difference in how the customer is charged. A self-employed person will require significantly more effort than a salaried employee with job longevity,” Ailion says. Having past credit problems or a foreclosure on your record can also factor into your rates.
LoanDepot, New American Funding, Wells Fargo Bank
Our Picks for the Best Mortgage Companies
Quicken Loans was best through and through, with a wide range of available loan options, fair rates, a lot of learning tools, and great navigation on its website. The knowledge center broke down the different loan types in a chart so we could quickly scan for “Easier Qualification” or “Lower Money Down.” When we wanted more specific advice, the online chat feature made it easy to get an answer, and we reached a person over the phone in less than five minutes.
Quicken Loans impressed us with its easy-to-use website and wide range of options.
When it came time to pull the trigger, the online pre-approval form took less than 15 minutes and asked questions we could actually answer. It only took the company another 15 minutes to get in touch with us after hitting “apply.” End-to-end, we were pre-approved in under 30 minutes. Best of all, we weren’t inundated with emails and phone calls after our initial conversation — if you’re in the shopping-around phase, this company knows when to give you space.
Alliant Credit Union offered low rates (starting at 3.625 percent) and one of the lowest projected monthly payments of our final contenders, but the company went above and beyond affordability. Our experts tell us first-time home buyers often need a little more than just fair pricing.
Some buyers, more so first-time buyers, need a patient, in-person, hand-holding lender. For internet lenders with an 800 number, more experienced buyers with high credit scores, longevity on the job, and no issues are going to be the better fit.
And that is what we got with Alliant. When we called to ask about its pre-approval process, we got through to a loan officer on the third ring. The officer was pleasant, and even offered to help us complete the pre-approval application if we weren’t sure how to do it ourselves. The company employee pool may be smaller than at a mega-bank, but you’ll get a tailored level of customer service, something first-time buyers may be grateful for when the about-to-close-on-my-first-house panic sets in.
If this isn’t your first stack of mortgage paperwork, you’re likely past the hand-holding phase and are well into the let’s-just-get-this-done phase. For those finding themselves in this category, we recommend Citibank.
Citibank offered below-average interest rates (3.625 percent), low closing fees ($3,094), and a low estimated monthly payment for our fictional $150,000 mortgage. The process for pre-approval was also painless. We were able to fill in almost everything online within 15 minutes — saving us the hassle of giving the loan officer more information later — and we were contacted with a response quickly. A loan officer was assigned to us and called within an hour, but we didn’t really need it. The initial “Thank You” page included all the necessary next steps to keep things moving along.
If you do run into a problem, Citibank can handle it. You can reach a representative via live chat, get answers through an impressive knowledge center database, shoot off an email, or call in when it fits your schedule.
The key to a smooth refinancing is to get through the process quickly with no hassles. First Internet Bank has transparent rates online so we could compare before we applied. When we did apply, the response was immediate and a loan officer called within 30 minutes to follow up. It doesn’t get faster than that.
Buying a home is stressful, and knowing how to coordinate all of the steps and people involved can add to that stress. New American Funding aims to alleviate some of that pain by acting as a one-stop mortgage shop. The company keeps its major functions in-house — unlike other lenders, it doesn’t outsource its underwriting — which may translate into a faster approval process and earlier closing date. It also provides ancillary services like helping you find a realtor.
We appreciated the customer service from New American Funding. The loan officer we talked to was happy to answer all our questions and provide us with additional information that left us feeling informed. He even walked us through some examples of the company’s loan assistance programs while being upfront about the fact that those particular programs have very strict criteria (which he also laid out for us).
If you’re looking for one company that can consolidate your homebuying needs, New American Funding is worth a look.
The Best Mortgage Companies: Summed Up
Did You Know?
To get the best rates and options, aim for a 20 percent down payment.
Having at least 20 percent will also help you avoid private mortgage insurance (PMI), an additional monthly fee that protects the lender in the event you default on the loan.
Can’t get to 20 percent? Don’t worry, you can still qualify for a mortgage. One route is to pay that PMI insurance on a conventional loan. It’s also possible to take on a second smaller loan to cover the difference in your down payment. (This loan is often called a piggyback loan.) You may also qualify for a government-backed Federal Housing Administration (FHA) loan, especially if you’re a first-time buyer.
“Federal Housing Administration loans offer the advantage of a lower down payment and qualification with lower credit scores,” says Glenn Phillips, CEO of Lake Homes Realty. “In addition, FHA loans typically have lower mortgage rates and allow sellers to pay much of the closing costs — a big benefit for first-time buyers.”
A mortgage isn’t a one-size-fits-all loan product.
There are several types of loans, and a number of repayment lengths and terms to consider.
- Conventional loans: Conventional loans are backed by the bank or lender that issues the loan. The length of your loan can vary from 15 years to as long as 30 years, and while 20 percent down payments are ideal, you may still qualify with less.
- FHA loans: FHA loans are backed by the government, but issued by private mortgage companies. FHA loan programs were developed to help buyers who may not otherwise qualify for a mortgage, like first-time buyers with a smaller down payment, or single parents with a limited credit history. But these loans do come with a downside: “You may have to pay mortgage insurance (which is a cost worthy of consideration) and there are typically more requirements to meet compared to a conventional loan,” says Andrew Schrage, co-founder of MoneyCrashers.
- Veterans Affairs loans: Both active duty and retired military personnel are typically eligible for VA home loans. These home loans come with several advantages, such as low down payments and no PMI.
- United States Department of Agriculture: Those living in rural areas (or those with dreams of moving to a big farm in the country) may qualify for a USDA loan. “USDA loans have many benefits,” notes Phillips. “These include 100 percent financing, lower-than-market interest rates, low monthly private mortgage insurance premiums, and flexible credit qualification rules.” But there is a catch: Finding these loans may be more difficult; the paperwork requirements may increase; and only homes in actual rural areas (not suburbs or edge-of-town scenarios) typically qualify.
Interest rates are low right now, so a fixed-rate loan is probably your best bet.
With a fixed-rate loan, your interest rate is locked in for the life of the loan, meaning you’ll have a set monthly payment each month and know what to expect for the entire life of your mortgage. That can be a good thing and a bad thing. If interest rates go down after you’ve locked in your rate, you’ll have to refinance to get the lower rate.
With an adjustable rate loan, your initial interest rate will lock in for a period of time, but it may increase or decrease later.
Adjustable rate loans were very popular when interest rates were high. It was assumed that with an adjustable rate loan, the borrower would not be locked into a high rate once rates dropped. In today’s market, interest rates are at historic lows, so an adjustable rate is not really advantageous to the borrower, even if the adjustment rate is capped at some maximum.
In December 2015 the Federal Reserve raised interest rates for the first time in a decade, but the change was a small one: only a 0.25 percentage point increase.
While the Fed doesn’t set individual interest rates — that is largely determined by your mortgage company and your specific circumstances — most experts agree a rise in interest rates on the federal level could mean your loan rates will go up if you wait too long.
Granted, “too long” could mean a few months or a few years. Even when interest rates increase, they do so in a rise-and-fall pattern. So, if you lock in a rate today, in six months the going rate could be lower even if rates are on the rise overall. But with the Fed seemingly committed to gradually raising rates, you will most likely get a better interest rate if you buy a house now than if you wait two or three years.
You should start preparing financially six months before you plan to buy.
Our experts agree, you’ll get the best deal if you prepare financially (and maybe a little mentally) before you fill out your first pre-approval form. Here’s how:
- Bump up your credit scores. Lenders vary on what credit score approval numbers they require, but the higher you can get yours, the better. Dispute errors on your credit report, pay down large debts, and pay your bills on time in the months leading up to applying. “When preparing to buy a first home, it can save you a lot of time and money if you have your credit history in order. Don’t wait to find your dream home only to find you can’t qualify for the mortgage,” says Phillips.
- Don’t take on new debts leading up to applying. “If you're trying to qualify for a home loan, the last thing you want to do is to take out a major credit purchase, such as a car loan,” says Schrage, “though FHA loans allow for a higher percentage of debt-to-income ratio than conventional loans.” In general, adding new debt can lower your scores and hurt your chances of getting a mortgage.
- Save more than your down payment. In addition to your down payment, you’ll also be responsible for paying closing costs, and if you’re buying a new home, you may have moving costs.
- Practice making your payments. Use a monthly payment estimate calculator (available on all of our top picks’ websites) to figure out what your monthly mortgage payment will be, then “pretend” to pay it for several months by sending the difference between your current rent or mortgage right into savings. It may seem silly, but this small step can help you make sure the payments are doable.
The Bottom Line
The mortgage rate you qualify for will be uniquely yours, so while rates matter, so does customer service. And if it’s your first time buying a home or if you’re a freelancer trying to get approval, customer service will matter even more.
Pull your credit reports. Thanks to a federal law, you’re entitled to one free credit report from each of the three major credit bureaus — Equifax, TransUnion, and Experian — from AnnualCreditReport.com. Your scores are not included, though. To get your scores, you’ll need to pay a small fee to each bureau. You’ll also want your tax documents, pay stubs, and bank statements handy.
Find a real estate agent. You don’t need to wait until you’re pre-approved and ready to buy to start building a real estate team. A good agent can do more than find homes; they can help you understand the mortgage approval process and guide you through the trickier steps (like putting the right paperwork together).
Study the interest rates. All of the mortgage companies we recommend have fair interest rates, but interest rates fluctuate throughout the month. It may only be a fraction of a percentage point, but if you keep an eye on rates and lock in your mortgage rate on a low day, you could save yourself thousands over the life of your loan. In the 30 days before we published this review, the average 30-year fixed rate mortgage fluctuated by 0.18 percentage point (between 3.66 and 3.84). Doesn’t seem like a lot, but over the course of a 30-year mortgage for $150,000 that’s a difference of $5,515 — a nice little chunk you’d save simply by watching the rates.
Get pre-approved. If you’re buying a home, you’ll need a pre-approval letter from a qualified lender before you can submit an offer. Most pre-approvals are good for at least 30 days and all of our top picks will let you apply online or over the phone.