5 Tips for Finding the Best Mortgage Lender - NerdWallet (2024)

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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.

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Last updated on March 1, 2024

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✅ Fact checked and reviewed

Edited by

✅ Fact checked and reviewed

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.

  • 50+ mortgage lenders reviewed and rated by our team of experts.
  • 40+ years of combined experience covering mortgages and financial topics.
  • Objective, comprehensive star rating system assessing 120+ categories and 5,000+ data points.
  • Governed by NerdWallet's strict guidelines for editorial integrity.

NerdWallet's mortgage content, including articles, reviews and recommendations, is produced by a team of writers and editors who specialize in home lending. Their work has appeared in The Associated Press, USA Today, The Washington Post, MarketWatch, Newsweek and many other national, regional and local publications. They have been cited in publications including The Wall Street Journal, and appeared on NerdWallet's "Smart Money" podcast as well as local TV and radio.

5 Tips for Finding the Best Mortgage Lender

Have you or your spouse served in the military?

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Lender

NerdWallet Rating

Min. credit score

Min. down payment

Learn more

Guaranteed Rate: NMLS#2611

Top 3 most visited 🏆Learn moreat Guaranteed Rate

at Guaranteed Rate

5.0

/5

Home loans overall

Best for HELOCs

620

3%

Top 3 most visited 🏆Learn moreat Guaranteed Rate

at Guaranteed Rate

Flagstar: NMLS#417490

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on NerdWallet

5.0

/5

Home loans overall

Best for overall mortgage experience

620

3%

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on NerdWallet

PNC: NMLS#446303

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on NerdWallet

5.0

/5

Home loans overall

Best for first-time home buyers and FHA loans

620

3%

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on NerdWallet

Andrews Federal Credit Union: NMLS#410421

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on NerdWallet

5.0

/5

Home loans overall

Best for first-time home buyers

620

3%

LEARN MORE

on NerdWallet

NBKC: NMLS#409631

Top 3 most visited 🏆Learn moreat NBKC

at NBKC

4.5

/5

Home loans overall

Best for FHA and VA loans

620

3%

Top 3 most visited 🏆Learn moreat NBKC

at NBKC

Learn moreat Guaranteed Rate

at Guaranteed Rate

Guaranteed Rate: NMLS#2611

5.0

Home loans overall

NerdWallet rating

Min. credit score

620

Min. down payment

3%

Why We Like It

Good for: borrowers seeking a broad menu of loans, including jumbo and interest-only options, renovation loans and government-backed mortgages, as well as home equity lines of credit.

Pros

  • Offers a one-day mortgage approval process.
  • Offers a generous selection of loans, including government-backed, interest-only, ITIN, jumbo and renovation loans.
  • Advertises a HELOC that can be funded in as few as five business days.

Cons

  • Origination fees are higher than average, according to the latest federal data.
  • HELOC has a relatively short draw period, which may not provide flexibility for someone who wants the option of accessing home equity over a longer period.

Read Full Review

Why We Like ItGood for: Borrowers who may benefit from Flagstar’s unique loan options, such as ITIN loans, loans for manufactured homes or physician loans.

Pros

  • Multiple loans for those who are renovating or building a home, including loans with interest-only payments during construction.
  • Offers home equity loans and lines of credit.
  • Offers down payment assistance and loans for underserved borrowers, including ITIN loans and loans with flexible qualifications in certain communities.
  • Interest rates are on the low side relative to other lenders, according to the latest federal data.
  • Borrowers can enter their information (including their desired loan amount, down payment and zip code) into the lender’s Mortgage Quote Comparison tool and receive a customized rate quote.

Cons

  • Home equity loans are not available in all locations served by Flagstar.
  • In 2022, the lender was fined for violating laws regarding properties in flood zones.

Read Full Review

LEARN MORE

on NerdWallet

PNC: NMLS#446303

5.0

Home loans overall

NerdWallet rating

Min. credit score

620

Min. down payment

3%

Why We Like ItGood for: borrowers with low to moderate incomes or limited down payments, as well as home buyers seeking mortgages in higher-priced regions of the nation.

Pros

  • Offers several low-down-payment loan options, including FHA, VA, USDA and the PNC Community Loan.
  • Receives high marks for customer satisfaction, according to J.D. Power and Zillow.
  • Mortgage rates are lower than the industry average, according to the latest federal data.
  • Jumbo loans available with 5% down payment.

Cons

  • Doesn't offer renovation mortgages or home equity loans.
  • In-person service is not available in every state.
  • You’ll have to create an account or supply personal data to get answers by phone.

Read Full Review

LEARN MORE

on NerdWallet

Andrews Federal Credit Union: NMLS#410421

5.0

Home loans overall

NerdWallet rating

Min. credit score

620

Min. down payment

3%

Why We Like ItFirst-time home buyers and military borrowers in the Mid-Atlantic looking for a lender with deep roots in their local communities.

Pros

  • Caters to first-time home buyers with incentives and education.
  • Provides extra support for military borrowers, including branches near bases in Germany, Belgium and the Netherlands.
  • Offers HELOCs and home equity loans at competitive interest rates.

Cons

  • Physical branches in the U.S. are limited to Maryland, New Jersey, Virginia and Washington, D.C.
  • Does not offer renovation or construction home loans.

Read Full Review

Learn moreat NBKC

at NBKC

NBKC: NMLS#409631

4.5

Home loans overall

NerdWallet rating

Min. credit score

620

Min. down payment

3%

Why We Like ItGood for: borrowers who want low rates and fees and an online experience with phone support. VA loans are an emphasis.

Pros

  • 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.

Cons

  • HELOCs and construction-to-permanent loans are available only in the Kansas City metro area.

Read Full Review

LEARN MORE

on NerdWallet

Pennymac: NMLS#35953

4.5

Home loans overall

NerdWallet rating

Min. credit score

620

Min. down payment

3%

Why We Like ItGood for: rate-conscious borrowers who want to shop and compare a wide variety of mortgage types online.

Pros

  • Rates are on the low side, according to the latest federal data.
  • An online tool makes it easy to customize a rate quote online, with no contact information required.
  • “Lock & Shop” lets you secure a rate for up to 90 days while you house-hunt, and switch to a lower one if rates drop while you shop.

Cons

  • Origination fees are on the higher end, according to the latest federal data.
  • Doesn't offer home equity lines of credit or renovation loans.
  • Online chat is available only in the logged-in experience.

Read Full Review

LEARN MORE

on NerdWallet

Truist: NMLS#399803

4.5

Home loans overall

NerdWallet rating

Min. credit score

620

Min. down payment

3%

Why We Like ItGood for: first-time and low-income home buyers, early career doctors and other borrowers interested in low-down-payment mortgages, especially those in South Carolina, North Carolina, Texas and Virginia.

Pros

  • Offers a wide variety of loan options, including construction loans, programs for early career doctors, a wide variety of jumbo loans and home equity lines of credit.
  • Proprietary grant program can help borrowers afford down payment and closing costs.
  • Mortgage rates are lower than industry average, according to the latest federal data.

Cons

  • Customized rates aren't available online without contacting the lender.
  • For borrowers who prefer to apply in person, branches are limited mostly to the South and East.
  • Mortgages aren’t available in all 50 states.

Read Full Review

LEARN MORE

on NerdWallet

Navy Federal: NMLS#399807

4.5

Home loans overall

NerdWallet rating

National / regional

National

Min. down payment

0%

Why We Like ItGood for: Military borrowers who’ve exhausted their VA loan benefits and qualified government employees who want to compare mortgage options without down payments.

Pros

  • Offers unique loan options aimed at military borrowers, such as a proprietary loan called Military Choice that works as an alternative to VA loans.
  • 24/7 customer service supports borrowers stationed overseas.
  • Offers home equity loans and lines of credit.

Cons

  • Borrowers must join the credit union before applying for a mortgage.
  • The lender does not offer renovation or construction loans.
  • When we tried their customer service line, we sometimes waited longer than 10 minutes before being connected with a representative who could answer our questions.

Read Full Review

LEARN MORE

on NerdWallet

Better: NMLS#330511

4.5

Home loans overall

NerdWallet rating

Min. credit score

620

Min. down payment

3%

Why We Like ItGood for: borrowers who prefer an online experience, prize low rates and are primarily interested in conventional loans.

Pros

  • Offers a one-day mortgage that lets eligible borrowers apply, lock in a rate and get a loan commitment within 24 hours.
  • Average interest rates are on the low end compared to other lenders, according to the latest federal data.
  • Offers a HELOC that can be used for a primary, second or investment home.

Cons

  • Doesn't offer harder-to-find loans, such as construction loans, renovation loans, or USDA mortgages.
  • Finding descriptions of all of the loan offerings on the website requires some digging, and the lender does not have a mobile app.
  • Average lender fees are on the high end compared with other lenders, according to the latest federal data.

Read Full Review

LEARN MORE

on NerdWallet

Alliant: NMLS#197185

4.5

Home loans overall

NerdWallet rating

Min. credit score

N/A

Min. down payment

3%

Why We Like ItGood for: eligible borrowers who are open to joining a credit union and want a mortgage from an online lender.

Pros

  • Borrowers can apply entirely online. The lender is also very transparent about what borrowers can expect from the process, including nontraditional customers.
  • Borrowers do not need to become members of the credit union until they’ve reached the closing process, meaning that interested home buyers can apply and get rate offers without committing to membership.
  • Offers customized rate quotes, including a detailed breakdown of estimated closing costs.

Cons

  • Doesn’t offer renovation loans.
  • Joining the credit union adds a step to the application process.

Read Full Review

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

  • Compare online mortgage refinance lenders

  • Compare mortgage rates

  • Get preapproved for your mortgage

Last updated on March 1, 2024

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.

To recap our selections...

NerdWallet's 5 Tips for Finding the Best Mortgage Lender

  • Guaranteed Rate: Best for HELOCs
  • Flagstar: Best for overall mortgage experience
  • PNC: Best for first-time home buyers and FHA loans
  • Andrews Federal Credit Union: Best for first-time home buyers
  • NBKC: Best for FHA and VA loans
  • Pennymac: Best for FHA loans
  • Truist: Best for HELOCs
  • Navy Federal: Best for VA loans
  • Better: Best for loan variety
  • Alliant: Best for jumbo loans
5 Tips for Finding the Best Mortgage Lender - NerdWallet (2024)

FAQs

What factors to consider when choosing a mortgage lender? ›

7 Key Factors To Consider When Choosing a Mortgage Lender
  • #1: Reputation in the Community. ...
  • #2: Recommendations From Experts You Trust. ...
  • #3: Loan Products They Offer. ...
  • #4: Interest Rates. ...
  • #5: Fees They Require. ...
  • #6: Their Loan Process Timeline. ...
  • #7: Their Customer Service Approach.
Sep 4, 2023

What not to say to a mortgage lender? ›

Here are some crazy things would-be home buyers have said to lenders, and why they're cause for concern.
  • 'I need to get an extra insurance quote due to … ...
  • 'I can't believe how much work the house needs before we move in' ...
  • 'Please don't tell my spouse what's on my credit report'
Apr 3, 2024

When you look for the best mortgage you should consider? ›

Ask about the loan's annual percentage rate (APR). The APR takes into account not only the interest rate but also points, broker fees, and certain other credit charges that you may be required to pay, expressed as a yearly rate.

What are the main factors that lenders look at to qualify you for a mortgage? ›

If you're applying for a mortgage, it's important to know how much home you can afford. Lenders use different criteria to qualify mortgage borrowers. They will likely start with your credit score, but they will also have questions about your income, your investments and even your frequency of relocation.

What are the five C's lenders consider when approving a loan? ›

One of the first things all lenders learn and use to make loan decisions are the “Five C's of Credit": Character, Conditions, Capital, Capacity, and Collateral.

Which factor is most important to lenders? ›

Your credit score is a pivotal factor that mortgage lenders use to assess your creditworthiness. A higher credit score can often lead to better mortgage rates and terms, while a lower score may result in less favorable options.

What is a red flag in mortgage? ›

Red Flag #1: When they offer you a rate that's lower than the APR. When a mortgage's APR is much higher than the actual rate, it means that the fees are a lot higher, too - and you'll be paying them over the life of your loan. A low rate might be enticing, but you have to consider the long-term cost.

What looks bad to a mortgage lender? ›

Racking up Debt

Your debt-to-income ratio – or how much debt you're paying off each month in comparison to how much money you're making – is just one factor that lenders look at when reviewing your mortgage application. If it's above a certain threshold (typically 43%), you'll be considered a risky borrower.

What question is a lender not allowed to ask? ›

Lenders aren't allowed to ask questions regarding sexual orientation, medical history, disabilities, political or religious beliefs and plans for family expansion.

What is the best mortgage rule? ›

According to the 28/36 rule, you should spend no more than 28% of your gross monthly income on housing and no more than 36% on all debts. Housing costs can include: Your monthly mortgage payment. Homeowners Insurance.

Where is the best place to look for a mortgage loan? ›

  • Bank of America. ...
  • Alliant Credit Union. Best for credit union home loans. ...
  • Wells Fargo. Best for conventional loans. ...
  • Veterans United Home Loans. Best for VA loans. ...
  • BMO Bank. Best for specialty loan programs. ...
  • PNC Bank. Best for first-time homebuyers. ...
  • Rocket Mortgage. Best online mortgage. ...
  • SoFi. Best for customer experience.

What to watch out for when getting a mortgage? ›

What to know before buying a house
  • Mortgage prequalification and mortgage preapproval aren't the same thing. ...
  • You'll pay more without a minimum 20% down payment. ...
  • Mortgage fees should be factored in. ...
  • The higher your credit score, the better. ...
  • Lenders value job stability. ...
  • Mortgage payments must fit your budget.

What two things are lenders most interested in? ›

What do mortgage lenders look for?
  • Your credit score. Your credit score is a three-digit number that quickly communicates a lot of information about you as a borrower to your potential lenders. ...
  • Your payment history. ...
  • Your income and employment history. ...
  • Your debt-to-income ratio. ...
  • Your assets. ...
  • Your down payment.
Apr 18, 2022

What are the 3 C's of credit that lenders look for in a loan applicant? ›

Character, capital (or collateral), and capacity make up the three C's of credit. Credit history, sufficient finances for repayment, and collateral are all factors in establishing credit.

What should you consider before deciding on a lender? ›

Comparing rates and terms from different mortgage lenders — banks, credit unions and online lenders — is key to finding the best deal. While shopping around (preferably with at least three lenders), be sure to compare the following: Loan terms (loan amount, interest rate, annual percentage rate, etc.)

How would you determine which lender to use? ›

How to choose a mortgage lender in 8 steps (and avoid headaches along the way)
  1. Monitor and improve your credit.
  2. Budget and save for your down payment.
  3. Narrow your loan program preferences.
  4. Understand different types of mortgage lenders.
  5. Compare lenders by rates, terms and service.
  6. Get preapproved.
  7. Compare loan estimates.
Jul 22, 2024

What are the 4 factors of mortgage? ›

There are four components to a mortgage payment. Principal, interest, taxes and insurance.

What should you consider when evaluating a lenders offer of a mortgage loan? ›

By comparing offers from multiple lenders, you're more likely to find the best rate and save money. Before shopping for offers, determine what type of mortgage makes the most sense for you and your finances. Consider factors like interest rates, discount points and closing costs when comparing offers.

What four factors do lenders generally use in their loan making decisions? ›

What Are the Four Cs of Credit?
  • Capacity.
  • Capital.
  • Collateral.
  • Character.

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