8 Best Mortgage Lenders of August 2021

A mortgage is likely the largest loan you’ll ever take out in your life. You’ll be paying it for years, which makes getting a lower interest rate essential. Comparing loan terms such as mortgage rates, fees, and closing time are steps that every homebuying customer should take before settling on a lender.

The best mortgage lenders tend to offer different loan programs for consumers of different credit levels. They should also have a streamlined mortgage pre-qualification and application process and as clean a record as possible with regulating agencies. If you’re already on your way and would just like to calculate your mortgage, you can use our mortgage calculator.

Our Top Picks for Best Mortgage Lenders

Best Mortgage Lender Reviews

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  • First-time homebuyers can pay as little as 3% down
  • Best in customer satisfaction on J.D. Power study
  • Representatives are available every day of the week during flexible hours
  • No home equity loans or home equity lines available
  • No brick and mortar locations

Quicken, a brand under Rocket Mortgage, is the largest retail lender in the US, offering various mortgage products, including conventional mortgages, ARM FHA, VA, and jumbo loans. Aside from the traditional 15- and 30-year mortgages, the lender also has loans with flexible terms between 8 and 29 years.

Quicken’s YOURgage program allows homebuyers to choose the term of their fixed-rate loan and borrow up to $548,250. First-time homebuyers can pay as little as 3% down, which is especially helpful if you haven’t saved the 20% benchmark for a down payment.

Quicken also stands out for the high quality of its customer experience. Customers can speak with one of its 3,000+ mortgage bankers 24/7 and process their loan online in all 50 states. Moreover, because Quicken services 99% of its mortgages, it keeps a stable support line from start to finish.

Type of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA

Type of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA

Type of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA

LATEST NEWS AS OF AUGUST 2021

QUICKEN LOANS COVID-19 RESPONSE

Quicken Loans clients impacted by COVID-19 can fill out an online application by visiting RocketMortgage.com. The company offers an initial 3-month forbearance, extendable up to 12 months, which temporarily stops mortgage payments. Once the crisis is over, Quicken Loans will work with clients to determine the best course of action. Clients won’t experience an impact on their credit as a result of the forbearance.

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  • Compare offers from over 1,500 lenders in minutes
  • Various home loan learning sources available
  • LendingTree gives your information to various loan originators when you apply. These companies compete for your business, and those lenders will contact you, probably during the same period, via phone and email

LendingTree is the go-to solution for browsing and comparing mortgage products from over 1,500 different lenders. Find the best loan for you by following the company’s 3-step process: 1) answer a few questions, 2) shop and compare lenders, and 3) talk with a loan officer or apply online.

At the beginning of the quoting process, LendingTree will ask for your income, assets, education, debts, occupation, length of time at your job, and SSN. Then, the company performs a credit pull and uses your FICO score to determine a lender recommendation. Finally, up to five lenders put together a preliminary quote and contact prospective borrowers.

LendingTree also has many resources regarding mortgages and loans, such as an expansive glossary of loan terminology, current rates for all types of home loans, several calculators, and a national loan officer directory. It also features numerous reviews so users can see the experiences others have had with each lender.

Type of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA, USDA (specifics vary by lender)

Minimum Down Payment

Vary by lender

Type of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA, USDA (specifics vary by lender)

Minimum Down Payment

Vary by lender

Type of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA, USDA (specifics vary by lender)

Minimum Down Payment

Vary by lender

LATEST NEWS AS OF AUGUST 2021

LENDINGTREE COVID-19 RESPONSE

LendingTree’s wealth of mortgage resources includes a detailed explanation of various coronavirus pandemic mortgage relief programs. It also features information about federal mortgage relief programs, instructions on finding your current loan services, and summaries of several lender relief programs.

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  • Competitive interest rates
  • No down payment or PMI required
  • Online credit counseling program available for borrowers with poor credit history
  • No home equity loans available
  • Only has physical branches in 18 states

Veterans United specializes in loans backed by the U.S. Department of Veterans Affairs, making it a great option for active-duty service members and reservists, as well as veterans and their families. Although VU doesn’t offer home equity loans or HELOCs, it does offer very competitive rates.

VU offers a free online credit counseling program for veterans and service members with low credit scores called the Lighthouse Program. A credit specialist is assigned to each customer to help fix errors on credit reports, map out a score improvement plan, and advise the borrower until they reach their credit score goal.

VU’s mortgage programs are available in all 50 states and Washington DC. However, keep in mind that the lender only has physical branches in Alabama, Alaska, California, Colorado, Florida, Georgia, Hawaii, Idaho, Illinois, Kentucky, Nebraska, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, Washington.

Type of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA, USDA

Type of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA, USDA

Type of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA, USDA

LATEST NEWS AS OF AUGUST 2021

VETERANS UNITED COVID-19 RESPONSE

Veterans United offers an initial forbearance period of up to 180 days, temporarily suspending monthly mortgage payments. Borrowers have the option to extend that period for an additional 180 days. While the loan is in a forbearance program, VU won’t assess any late payment fees or accrue any additional interest on the loan. Entering into a forbearance plan won’t affect a borrower’s credit score.

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  • One of the nation’s top five lenders of FHA loans
  • Specific programs for low-income borrowers available
  • Home improvement and manufactured home mortgage loans available
  • Matches customers with down payment aid
  • No current mortgage rates on its website
  • No home equity products available
  • Unavailable in NY and NJ

Guild Mortgage offers government-backed FHA, VA, and USDA loans and programs that specialize in down-payment assistance. According to the Mortgage Bankers Association Report (MBA), Guild is among the nation’s top five lenders of FHA loans, making it an excellent option for qualifying borrowers with credit scores as low as 540 (provided they put at least 10% down).

Guild also offers an FHA Zero Down program for low to moderate-income homebuyers with imperfect credit and not enough saved up for down payment. Most FHA loans require at least 3.5% down, but Guild’s Zero Down program allows applicants with credit scores as low as 640 to get an FHA home loan without the need for a down payment.

Guild can originate loans in all states except New York and New Jersey — and Washington DC. Additionally, the company can fully close mortgages online via its digital platform, MyMortgage, which ensures a faster and more secure closing process.

Types of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA, USDA

Types of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA, USDA

Types of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA, USDA

LATEST NEWS AS OF AUGUST 2021

GUILD MORTGAGE COVID-19 RESPONSE

Guild Mortgage is actively monitoring the COVID-19 situation and won’t adversely report customer loans to credit bureaus. The company offers an initial forbearance option and hardship assistance in partnership with investors, as well assistance extensions depending on your case. However, this relief isn’t automatic, so remember to ask about these options.

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  • One of the largest selections of mortgage loans on our list
  • Program available for self-employed customers
  • Some loan programs have low credit score options
  • No equity home loans available

Caliber Home Loans features a low entry barrier and a program tailored explicitly towards self-employed individuals, making it easy for homebuyers who don’t earn a regular salary to purchase a new home. The company considers alternative credit data during the mortgage application process, in some cases offering low down payments of 3%.

Caliber Home Loans also has one of the largest selections of mortgage products of all the companies on our list, including Conventional, FHA, VA, USDA, ARM, Refinance, Bond, Renovation, Freddie Mac HomeOne, Freddie Mac Home Possible, and Fannie Mae HomeReady.

Caliber’s online application process is another standout feature. Customers can apply online by answering a few questions about themselves, their finances, and their budget. A representative will contact applicants shortly after, a process that may take as little as 15 minutes.

Types of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA, USDA

Types of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA, USDA

Types of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA, USDA

LATEST NEWS AS OF AUGUST 2021

CALIBER HOME LOANS COVID-19 RESPONSE

Caliber offers both short- and long-term solutions for those struggling to pay their mortgage due to COVID-19. There is a forbearance plan which postpones monthly payments, a repayment plan, and a deferral plan to keep payments suspended until clients reach the end of their loan. Alternatively, and upon request, modifications can be made to a client’s loan to make it more manageable.

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  • 324 branches nationwide, catering to military members, reservists, veterans, retirees, and annuitants
  • Up to 100% financing and 0% down payment options available
  • Rate loan match available
  • Doesn’t offer customized rates unless you apply
  • No private mortgage insurance

With its 324 branches, Navy Federal Credit Union (NFCU) ranks as our best lender for in-person assistance. NFCU services all of its types of mortgages in-house for the life of the loans, which can be important for customers looking to do business solely with their chosen lender. Furthermore, the lender charges less in mortgage points to allow borrowers access to its lowest interest rate.

VA loans are government-backed, so they don’t feature the same interest rate across lenders. However, borrowers looking into mortgage products through NFCU can take advantage of its rate loan match. If you find a better rate elsewhere, NFCU will match it or give you a deduction of $1,000 off your closing costs.

Navy Federal’s HomeBuyers Choice program stands out in the company’s line of products, offering 100% financing, a fixed interest rate, and a seller contribution of up to 6%. This makes it a strong alternative for members of the military who are buying their first home. Navy Federal membership is open to active-duty military members and reservists, veterans, retirees, and annuitants.

Type of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA, USDA

Type of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA, USDA

Type of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA, USDA

LATEST NEWS AS OF AUGUST 2021

NAVY FEDERAL COVID-19 RESPONSE

Navy Federal is offering eligible members a forbearance plan which temporarily suspends monthly mortgage payment requirements for a total of up to 18 months. Members will also be provided with options to make payments missed during forbearance, including a loan modification or a deferral. While closing a mortgage loan may take longer than usual, Navy Federal is honoring initial locked rates in light of COVID-19.

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  • Numerous retail and lending centers available nationwide
  • Down payment and closing costs assistance program
  • Online application
  • Rates shown are for a credit score of 740 or higher
  • Fee information isn’t available online
  • No renovation loans available

Bank of America’s diverse mortgage products, competitive closing costs, and interest rate estimates make it a solid lender choice. Existing customers benefit from significant discounts on origination fees.

Bank of America features over 4,300 retail financial centers and 2,900 lending centers throughout the nation. As a result, accessibility is one of the bank’s strong points, with choices for clients who prefer face-to-face interaction or an end-to-end digital experience.

The Home Loan Navigator, which can be accessed on the web or through the bank’s mobile app, reduces paperwork by letting users track, sign, and submit documents online.

Type of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA

Type of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA

Type of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA

LATEST NEWS AS OF AUGUST 2021

BANK OF AMERICA COVID-19 RESPONSE

Bank of America is extending payment deferral and forbearance options to those experiencing financial hardship due to the COVID-19 pandemic. In both cases, payment due dates will be delayed but not forgiven or erased. The company will work with its clients on repayment options, and there won’t be any late charges. Eligibility for these programs varies depending on the owners or insurers of the loan product. If Bank of America owns the loan, both deferral and forbearance options will be available. Only those who have a single due payment on their loans can apply for a deferral. If a third party owns or is insuring the loan, Bank of America will follow its guidelines.

  • No origination, underwriting, or application fees
  • Assistance programs for down payment and closing costs
  • Representatives available every day until 9 pm ET
  • Doesn’t offer customizable terms
  • No VA, USDA, FHA, home equity, or home improvement loans
  • Not available in Hawaii, Massachusetts, Nevada, or New Hampshire

Better Mortgage aims to make homeownership accessible through a transparent process. Since the company operates fully online, it can afford to forego some of the fees charged by traditional brick-and-mortar lenders. Despite this focus on the digital, borrowers also gain access to a dedicated loan officer.

Speed is another of Better’s strong suits. Consumers can obtain a rate quote and a letter of preapproval in just a few minutes. Better also affirms that it can close mortgages in as little as 14 days.

Better offers a price guarantee if another lender has a more competitive price. They promise to match any valid competitor’s offer and credit you $100. The $100 is yours to keep either way, but borrowers must send the other lender’s estimate within one business day from the date it was issued.

Type of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable

Type of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable

Type of Loans

Purchase, Jumbo, Refinance, Fixed, Adjustable

LATEST NEWS AS OF AUGUST 2021

BETTER.COM COVID-19 RESPONSE

Better is currently offering relief to its borrowers experiencing hardship as a result of COVID-19. This relief includes loan forbearance, waiting late and overdraft fees, suspending foreclosure for all borrowers whose loan it services, and suspending credit reporting following Fannie Mae guidelines. Better has had to modify its mortgage offerings and eligibility requirements for some loan products. They’ve increased their minimum FICO credit score requirement for cash-out refinance loans to 680. The minimum requirement for loans for purchase or rate-and-term refinance is still 620. Their Jumbo loan offerings are restricted, and they cannot currently complete a Jumbo loan with a loan-to-value (LTV) ratio over 80%.

Other Lenders We Considered

When we looked at the mortgage lending industry, we found that many of the biggest home loan lenders didn’t necessarily offer the best products. However, they might excel in other areas.

Guaranteed Rate

  • Allow borrowers to upload and e-sign documents in 300 branches in 46 states
  • Provides sample rates for many of its loan products
  • Participates in down payment assistance programs: HomeReady, HomePossible®, Fannie Mae 97%, and Freddie Mac HomeOne
  • No home equity products
  • Not available in Mississippi, Nebraska, Vermont, or West Virginia

Guaranteed Rate is another online mortgage lender that allows for a fully digital process that can be tracked via an interactive checklist. That said, borrowers who also want a physical branch can enjoy access to one of the lender’s 300 branches across 46 states.

Guaranteed Rate has a full suite of comprehensive educational resources, including a Know Your Neighborhood feature (in beta) that gives borrowers the ability to view market and population trends by zip code, as well as school data and taxes.

While this lender provides a mortgage affordability calculator, it doesn’t specify whether the low rates also consider that the borrower has bought mortgage points.

  • Loan Types – Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA, USDA
  • Minimum Down Payment – 3%

LATEST NEWS AS OF AUGUST 2021

GUARANTEED RATE COVID-19 RESPONSE

Guaranteed Rate is extending payment deferral and forbearance options to those experiencing financial hardship due to the COVID-19 pandemic. This includes loan modifications, forbearance plans, and suspension of credit reporting for borrowers in forbearance programs, repayments, or trial period programs. Guaranteed Rate has also modified its self-employed borrower requirements for Fannie, Freddie, FHA, and Jumbo loans.

PrimeLending

  • Proprietary Loanplicity® app guides borrowers through the entire process, from application to closing
  • Ample selection of mortgage products
  • Participates in over eight closing cost and down payment assistance programs
  • No lending fees on any VA loan, including renovation
  • Float-down rate lock option available within 20 days of closing, if rates drop
  • No home equity products
  • Must speak with a loan officer before an online application
  • Qualifying requirements not published

PrimeLending has one of the broadest range of loan products of all the companies on our list, including some unique options, such as pool escrow loans, energy-efficient mortgages, and FHA 203(k) renovation loans. Low- to moderate-income borrowers can receive up to $2,000 in closing credits based on income and area with its Neighborhood Edge program.

While PrimeLending’s selection is wide, the lender could be more transparent regarding its requirements for borrowers. Further, though the company touts its online availability, potential homebuyers must first speak with a loan officer before completing an application.

  • Loan Types – Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA, USDA, Home Renovation, Manufactured Home
  • Minimum Down Payment – Not disclosed

LATEST NEWS AS OF AUGUST 2021

PRIMELENDING COVID-19 RESPONSE

PrimeLending had a mortgage forbearance program in 2020, but there is currently no information related to COVID-19 programs, other than some informative posts on the page’s blog. We recommend contacting your loan officer directly.

Flagstar Bank

  • Over 2,000 mortgage brokers in the U.S. and service loans in every state
  • Offers some options that don’t require down payments
  • Has several specialized products, such as multiple properties or high balance loans
  • Borrowers are assigned a single loan advisor and loan processor
  • Rates easily accessible
  • Home equity products not available nationwide but primarily concentrated in Michigan
  • Home equity products have an annual $7 fee and must be taken out in person
  • A high number of complaints in the CFPB database related to trouble during the payment process

More well known as a mortgage servicer than an originator, Flagstar has a full suite of loans on offer, including home equity products and several specialty loans. One example is the professional loan, designed with recent graduates with high earning potential in mind. In some cases, Flagstar may even exclude some student loan debt from its DTI calculation.

  • Loan Types – Purchase, Jumbo, Refinance, Fixed, Adjustable, FHA, VA, USDA, Home Renovation, Manufactured Homes
  • Minimum Down Payment – 3%

LATEST NEWS AS OF AUGUST 2021

FLAGSTAR COVID-19 RESPONSE

Flagstar is currently offering a three-month forbearance plan, extendable in further three-month implements. The company has also suspended foreclosures, evictions, and repossessions per investor/insurer guidelines or longer if authorized by state or federal law.

How Much Will I Pay for My Mortgage?

Mortgage Loans Guide

How Do Mortgages Work?

Thinking of buying a home but don’t have all the money upfront? A mortgage could be the solution. Mortgages are loans given by financial institutions to purchase or refinance a property. The home you’re buying with a mortgage loan serves as your collateral. If you’re unable to make your mortgage payments, the bank will seize your property.

Financing your home with a mortgage means that your lender takes on a financial stake in the property. To secure this investment, they require that borrowers get homeowners insurance until the loan is paid off in full.

If you’re thinking about refinancing your home, check our mortgage refinance calculator.

Type of mortgage loans

Mortgage companies offer various loan products varying in terms, interest rates, and property usage to fit the needs of homebuyers.

  • Conventional loans: Not part of any government program, conventional loans are the most common type of mortgage loan. They have a loan amount limit of $489,350 in most counties and $726,525 in more expensive areas. If the down payment is less than 20%, insurance is required
  • Jumbo loans: A type of conventional loan classified as conforming or non-conforming, designed for properties exceeding the limit of $489,350. Non-conforming are for properties between $1-2 million. Both require good credit and a sizeable down payment to qualify.
  • FHA loans: A Federal Home Administration loan protects the borrower against default. FHA pays the lender a claim for the unpaid balance on the mortgage. Mortgage rates tend to be lower than conventional loans because they are backed by the Federal Housing Administration.
  • VA loans: Available to service members, veterans, and eligible surviving spouses, this loan offers competitive interest rates and doesn’t require a down payment or private mortgage insurance. However, it requires a VA funding fee. This loan provides options for refinancing, Native Americans, and remodeling a home for easier access for the disabled
  • USDA loans: This loan supports low-income borrowers in rural areas. No down payment is required, and it offers competitive interest rates, flexible credit score requirements, and low monthly mortgage insurance.
  • Reverse loans: For homeowners who are 62 years of age or older, a reverse mortgage allows them to convert part of the home’s equity into cash without selling the property. As long as you live in the house, you don’t have to pay back your loan. Homeowners under the age of 62 who would like to apply for this type of loan product should look into home equity loans.
  • Local loans: Provided by a local financial institution, these lenders have developed relationships with other local businesses, including real estate agents, local appraisers, and interior designers.

Here are our selections for the best VA loans and the best mortgage refinance.

Type of mortgage rates

There are a variety of costs associated with a mortgage loan. The annual percentage rate (APR) will reflect the interest rate, brokerage fees, and other charges established by the lender. When researching for a loan, always look for the most current mortgage rates.

Lenders typically divide their products between fixed mortgages and adjustable-rate mortgages.

Fixed-Rates Adjustable-Rate (ARM)
Interest rate doesn’t change during the loan term Interest rates can change during the loan term. By law, ARMs have a lifetime cap, which limits the interest rate raise on the loan
Monthly payments stay the same during the loan term Monthly payments may vary depending on interest rate fluctuation.
A good option for homebuyers planning to stay for a long time in the house A better option for homebuyers who plan to live in the house for a shorter amount of time
Three terms for fixed-rate mortgages: 15- year, 20- year, and 30- year ARMs have an adjustment period where the initial payment and rate for the loan will stay the same for an established period. It can be between 1 month and 5 years. Afterward, rates can change every quarter, year, 3 years, or 5 years
APR will not always reflect the maximum interest rate for the loan

How to Get a Mortgage Loan

Getting mortgage preapproval before deciding on a property can be crucial to avoid looking at homes you can’t afford. It will save you time and make the mortgage process more manageable.

Check our home affordability calculator to see if you’ll be able to afford a monthly mortgage payment.

To apply for a mortgage, you need:

  1. Copies of your last two pay stubs
  2. A copy of your most recent tax return
  3. W-2 and/or 1099 (although some lenders may require up to two years’ worth of these, depending on your employment history)
  4. A state-issued photo ID, such as your passport or driver’s license
  5. Statements of all your assets (IRAs, investment accounts, checking and savings accounts, etc.)
  6. Bankruptcy discharge documents (if applicable)
  7. A recent credit report
  8. Statements of any outstanding debts — some lenders may require information about monthly credit card payments
  9. In some cases, lenders may require additional documentation, like a history of alimony payments and gift letters, so make sure to ask before applying.

Before applying for a mortgage, check your credit score. If it’s done within 30 days, your score will not be affected by a hard credit inquiry, as credit reporting agencies recognize this as shopping around for the best rate.

Make sure to check your debt to income ratio before applying, as well. Lenders prefer borrowers with a debt-to-income ratio lower than 36%, and many lenders will not even consider borrowers with a ratio higher than 43%.

COVID-19 and the Housing Market

2021 started with mortgage rates plummeting to a 50-year historic low. Mortgage loan applications have increased due to the historic low rates. Freddie Mac and Fannie Mae, and the US Department of Housing and Urban Development (HUD) announced an extension of the coronavirus-related protective measures until September 30, 2021.

These protections include:

  • A nationwide suspension of all foreclosure sales and evictions
  • Additional mortgage relief options
  • Expansion of forbearance programs to incorporate those affected directly and indirectly by this crisis, effective immediately
  • Loan modifications such as loss mitigation, usually offered for natural disasters, may also be available— depending on the mortgage lender.
  • As per the Financial Services Forum, many lenders have also implemented supplemental relief efforts, like fee waivers, and are not reporting adverse credit to credit bureaus.

To help recover from the coronavirus, Freddie Mac is working with the Federal Housing Finance Agency (FHFA) to:

  • Ease the buying, selling, or refinancing process
  • Freddie Mac is relaxing employment verification requirements and offering appraisal alternatives in light of the crisis
  • Freddie Mac and Fannie Mae have announced a nationwide relief plan to help borrowers facing financial hardship due to COVID-19

What does a demand feature mean in a mortgage loan?

Having a demand feature in your mortgage loan — checked as “yes” in your loan’s closing disclosure — means that the lender can require you to pay the entirety of the loan at any time. The lender can make the request for any reason, so you should inquire about this feature before signing any contract.

What is a mortgage loan originator?

A mortgage loan originator, also known as MLO, is a trained professional that can guide applicants throughout the mortgage approval process. Their goal is to orient customers from the moment the loan application is prepared, up to its closing. Mortgage loan originators can be either state-licensed individuals or licensed company representatives.

Which is better: fixed or adjustable-rate mortgage?

A fixed-rate mortgage is a way to go, for now. According to Tim Lucas, adjustable rates “don’t make any sense at all,” given how low current rates are. “The only way that I would suggest an adjustable rate is if you’re expecting some big inheritance or if you’re able to pay off your mortgage in two or three years.”

“It’s a big risk having that adjustable rate because, at this point, it can only go up, so you might as well lock it in for 30 years and never worry about it again,” Lucas added.

I qualify for both conventional and government-backed loans. Which one should I choose?

Choosing a government-backed loan could save you hundreds of dollars on your mortgage in the long run when compared to a conventional loan.

“If you qualify for both a VA loan and a conventional loan, usually the VA loan will be the better option based on the interest rate if you select the proper lender,” said Jason Sharon. Additionally, loans never have private mortgage insurance (PMI), while conventional loans will require PMI if you make a down payment of less than 20% of the purchase price.

What documents do I need to apply for a mortgage?

Copies of your last two pay stubs
A copy of your most recent tax return
W-2 and/or 1099 (although some lenders may require up to two years’ worth of these, depending on your employment history)
A state-issued photo ID, such as your passport or driver’s license
Statements of all your assets (IRAs, investment accounts, checking and savings accounts, etc.)
Bankruptcy discharge documents (if applicable)
A recent credit report
Statements of any outstanding debts—some lenders may require information about monthly credit card payments

In some cases, lenders may require additional documentation, like a history of alimony payments and gift letters, so make sure to ask before applying.

Will I have a higher interest rate because I’m self-employed?

Your credit score and loan type will affect your interest rates, not your employment status. However, being self-employed will likely affect your qualifying status. Tim Lucas stated that “You’ll have a greater chance of being denied because the underwriter for that loan is going to have a harder time proving that you make a certain amount of money.”

If I want to buy a house, where do I start?

Andy Harris suggested that getting pre-approval before deciding on a property can be crucial to avoid getting ahead of yourself and looking at homes you can’t afford. “You must be pre-approved before you start looking at properties or talking to a real estate agent. Otherwise, you have no idea of what your target budget is,” he said.

Most consumers will get motivated by the piece of real estate itself because that’s the fun part. But other things should come first. “No one wants to go through the process of setting a budget and applying for a mortgage, underwriting a loan, and doing all these things, but you can’t put the cart before the horse,” he added.

Jumbo loans are mortgages designed to finance luxury properties and homes in competitive real estate markets. They are different from conventional loans in that they exceed the limits set by the Federal Housing Financing Agency. However, it’s hard to qualify for a jumbo loan because they aren’t purchased or guaranteed by Freddie Mac and Fannie Mae.

Applicants generally need an excellent credit history, a lower debt-to-income ratio, and will have to provide a larger down payment. They may also need a greater number of tax returns and more liquid funds in their bank account for the closing process, which tends to be longer because of the stricter requirements for a jumbo loan. Wells Fargo and New American Funding are examples of banks that offer jumbo loans.

To answer some of the questions in this section, we contacted Tim Lucas, Managing Editor for The Mortgage Reports; Jason Sharon, mortgage broker, US Navy Veteran, and owner of Home Loans, Inc; and Andy Harris, owner of Vantage Mortgage Group, Inc.

How We Found the Best Mortgage Lenders

Our rankings were derived from more than 60 data types in the following categories:

  • Types of loans offered: We favored companies that offered a variety of loan options, such as fixed- and adjustable-rate mortgages, term-lengths, and loans backed by government agencies.
  • Customer Experience: We favored companies that consider alternative credit data, provide a streamlined application process, at least two forms of customer service, and a variety of resources and educational tools
  • Reputation & Transparency: We evaluated consumer complaints with the CFPB and the number of regulatory actions filed with the NMLS

Over the course of our research, we consulted the following expert sources.

Summary of Money’s Best Mortgage Lenders of August 2021

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