If you’re ready to shop for a mortgage lender, this is a great place to start. We looked at multiple factors including minimum credit scores, competitive rates, loan variety, accessibility and programs for first-time buyers.
Because borrowers have different needs, financial profiles and loan goals, Forbes Advisor compiled a list of lenders that excel in various areas, so there’s something for everyone here.
In This Post
Latest Mortgage Rates
The Best Mortgage Lenders 2021
Better
Flagstar Bank
Guaranteed Rate
PenFed Credit Union
PNC Bank
Ally
LoanDepot
Quicken Loans
Bank of America
Guild Mortgage
Mr. Cooper
Methodology
We reviewed 12 mortgage lenders that do business both online and in-person throughout the United States. The lenders we reviewed represent some of the largest mortgage lenders by volume, which include banks, credit unions and online lenders.
Our scoring methodology included capturing 10 data points, which covered interest rates, lender fees, loan types, discounts, accessibility and borrower requirements. We compared each lender’s advertised mortgage rates to average mortgage interest rates as reported in Freddie Mac’s Primary Mortgage Market Survey. As of the reporting period, this data was accurate. However, be sure to check the latest mortgage rates to get the most accurate data.
The best lenders received a score of four stars or better and represented outstanding performance or services in one or more areas.
The following is the weighting assigned to each category:
- Loan costs: 30%
- Speed: 20%
- Credit requirements: 20%
- Loan types offered: 20%
- Access and availability: 10%
Specific characteristics taken into consideration within each category include average APR, average interest rate, origination fees, minimum credit score requirements, discounts and customer service availability.
We also offered bonus points up to 5% of the score when a lender considers alternative credit data.
Frequently Asked Questions (FAQs)
How much can I afford?
The first step in the homebuying process is to make a budget. Consider how much you earn each month and how much you spend (on debt, savings, retirement, college funds, etc.). Most experts recommend spending no more than 30% of your gross monthly income on your mortgage. That should also include taxes, insurance and applicable HOA fees. The Forbes Advisor affordability calculator will help you take the guesswork out of how much you should spend on a house.
What is private mortgage insurance (PMI)?
Private mortgage insurance, also known as PMI, protects the lender in the event that you default on your mortgage. Typically, if you make a down payment of less than 20% of your home’s purchase price, you will be required to pay PMI. How much you’ll pay for this insurance will vary, depending on factors that include the size of your down payment and your credit score.
How do I get preapproved for a mortgage?
Mortgage preapproval represents a lender’s offer to loan the buyer money based on certain financial circumstances and specific terms. Start by gathering documents your lender will need, including a copy of your Social Security card and recent W-2 forms, pay stubs, bank statements and tax returns. The lender you select will then guide you through the preapproval process.
How much money do I need for a down payment?
The larger the down payment you are able to make, the less you’ll have to finance when you purchase a home. On a conventional mortgage, making a down payment of at least 20% will prevent you from having to pay for private mortgage insurance. The minimum down payment required varies based on the type of mortgage you obtain. In 2019, the median down payment for first-time buyers was 6%.