Your home is likely to be the most expensive purchase you ever make. Mortgages can assist you with the costs, but they are a large debt. Because of the longer term of the loan, you’ll pay back more in terms of interest than capital.
That’s why it’s so important to lock in the best deal that you can. That means dealing with a well-established lender who knows what they’re doing. In the past, it was simple enough – you went to a bank or lender in your area.
With the internet and changing banking regulations, the field has been widened considerably. You can now borrow from an out-of-state lender, and various types of lenders as well.
The amount of choice is really good in that it makes lenders offer more competitive rates. Unfortunately, it also makes it harder to narrow down the right choice for you. We’re hoping to make that choice a little easier.
We’ve narrowed down the list to the top ten mortgage brokers. We checked different categories of lenders and zoned in on those that offered competitive rates, excellent service, and that had a good reputation.
Quicken Loans is a company that almost everyone knows. They spend a fair amount of time advertising their Rocket Mortgage plan. They promise to offer you outstanding rates and a smooth, hassle-free application process.
Considering that the company came in as the biggest loan originator in terms of volume in 2016, we think they’ve been delivering on that promise. The company does make things easier in that there are branches nationwide.
It is a highly reliable company and consistently offers good rates. You can also process your application online if you want to go almost paperless. Online applications are particularly simple because Quicken will, with your authorization, draw a lot of the details from your bank. It doesn’t get much simpler than this.
SoFi, shortened from Social Finance, was originally a refinancing company specializing in student loans. They then started making offerings of other personal finance products, including mortgages.
What makes SoFi unique is that they don’t just consider your current circumstances. They’ll also take your earning potential and qualifications into account. Something that is also useful is that your application sets off with a simple pre-qualification check.
This prequalification gives the company an idea of what your credit history is. Unlike a typical credit application, though, it will not affect your FICO score.
Everything is handled online. If you pass the pre-qualification stage, you can move on to choosing the right type of mortgage for you. From there you fill in all your details. There are a good few things that you’ll need to complete, proving that even paperless societies battle with dreaded paperwork.
Still, it’s not all that difficult, and it won’t take all that long to finish. You can choose a period of between five and thirty years. There are also options for interest-only loans, but the company typically won’t finance deals that it sees as being purely for investment purposes.
So, you’re likely to get the nod for an owner-occupied home, or possibly a second home, but no more than that. If your application is approved, it will take about a month to get all the funding through.
One nice advantage here is that you won’t be charged a fee for origination. This may not sound like much, but it can add up. You’ll want to include this benefit in your calculations.
Don’t be fooled by the weird spelling of the name. This company knows what it’s doing. It’s pretty good when it comes to refinancing, and that’s where the majority of its business comes from. They have a unique reward for loyal customers.
If you decide to refinance with them again, they’ll waive the fees for refinancing. They’ll also give you back the cost of getting an appraiser.
One of the things that makes them popular is that they offer simple solutions. They make sure you fully understand what you’re getting into and look for the right solution to fit your needs.
There are tons of reasons for wanting to refinance your home. Maybe you want to improve your rate, or you want to free up some income or want to draw down on your mortgage, this is a good option.
Customers rave about how excellent the service is and how easy the process is.
New American Funding
If you have a lower credit score or work for yourself, it’s harder to get mortgage financing. Most companies today run applications through complex algorithms.
These algorithms are great at assessing basic credit information, but they’re not good with applications that are on the fence.
With New American Funding, the final approval is not let up to a computer at all. Every application is vetted before a real-live person gives an answer. So, your application has a better chance of getting approved if it could go either way.
Computers see everything in black and white. When a human looks over an application, they look at different things – like your income levels and a good savings history.
They’ll be able to see whether or not your credit situation has improved and recognize good trends. You will need a FICO score of at least 580 to be approved, so it’s not all about applying human judgment.
Some companies will offer you a loan if your score is between 500 and 550, but you’ll pay a premium for it. Your mortgage can help you improve your payment history as long as you pay it and your other bills on time every month.
At a later stage, this may mean that you can apply for a reduced interest rate. You get to own your own home and make strides towards improving your credit profile.
Lenda runs completely online, so there is no is having to go into a branch to complete documents. You just go through to the website and have a quick pre-qualification check done.
If you pass this check, then you can proceed to choose your loan terms and complete the application. There is also a concierge service that guides you through each stage if you like.
This means that you have the support that you need, when you need it, even if you’re not all that good with computers. You’ll be told exactly what supporting documents you need to submit with your application.
Lenda offers the most user-friendly online experience of all the options we reviewed.
If you’re in a lower income bracket, saving for a down payment is difficult. VA and FHA loans are both government-backed and aimed at aiding low-income families. Citi Mortgage has the expertise to deal with these applications correctly.
The banks lending criteria is a little more relaxed in terms of minimum income that you must earn to qualify. If you are eligible for a VA or FHA loan, you’ve got a good shot of being approved with this company.
Citi mortgage is not most popular on the list we’ve reviewed, but with them streamlining their online application process, this could change.
A typical interest-only loan makes for more affordable payments. It should be seen as a short-term measure, though, because the capital doesn’t reduce.
That means you are paying a lot more interest, and never really building the equity in your property. Sometimes, though, this might be a viable option for you. With Guaranteed Rate, you can apply for an interest-only mortgage.
The difference with this company, though, is that they’ll only allow this for a maximum of ten years. This may be a good option if you want to buy something that’s a little out of your price range right now.
Or maybe if you’re getting a stellar deal. You do need to carefully consider what happens when then interest-only portion ends, and how much extra interest you’ll pay.
Guaranteed Rate is a good place to start if that’s what you need. They offer competitive rates, enjoy a stellar reputation, and receive high ratings.
Chase ranks as one of the world’s biggest banks.
You’ll be hard-pressed to find a country where these bankers are not represented. If you have a reasonable to good credit rating and would like a more conventional application process, this is the way to go.
Chase has 5,300 branches across the country, so there’s no shortage of support. You can choose to conduct all your banking through them.
They offer all the traditional banking accounts, like checking and savings accounts and various credit options. They also have a mobile app that is exceptional when it comes to helping you manage your account.
The bank might tend towards slightly higher rates because of its strong position. That said, the rates are still competitive. If you are a technophobe or want the traditional personal banking service, this is a good option.
Busey Bank is based in Missouri and scores high in terms of customer service. It’s not the largest lender, but it’s big enough.
It also has branches in Illinois, Florida, and Indiana. It’s one of the more established banks and was founded in 1868. This makes it the oldest of our top ten.
The bank offers a range of different mortgage options. These include:
- Fixed rates
- Variable rates
- VA mortgage loans
- FHA mortgage loans
PennyMac is a good option for those who may not have been able to save up a big down payment.
If you are eligible for FHA assistance, PennyMac is an excellent choice. They also offer more conventional products, jumbo loans, USDA, and VA loans.
The company keeps rates lower by being a direct lender. Just keep in mind that the low-down-payment means that you have to borrow more money. That means paying more interest over the long term.
Which is the Right Option for Me?
We’d advise that you go over all the options carefully. Your first step is to find out what your credit score is. This is an idea of what the credit scores mean for mortgage applicants:
- 800 or more: Good for you. Your excellent score indicates that you’ve got a higher chance of approval and access to the very best rates.
- 740 – 799: This is a very good rating and means you’ll get a decent interest rate and a good chance of being approved.
- 670 – 739: This is considered good. The interest rates are bound to be a little less favorable, but still pretty good. Your application has a good chance of approval.
- 580 – 669: We’re starting to head into,” maybe you should wait six months so you can improve your score” territory. This is not a bad rating, but you’re not likely to get a good rate.
- 300 – 579: This is a bad score. At the upper end, there is still a chance that you’ll get financing, but you’ll probably need a larger down payment. Also, if you are approved, it’s going to cost you. The interest you pay as a “bad risk” is pretty high.
Your best bet is to assess your credit status and financial circumstances carefully before applying.
It’s ideal to be able to afford the house comfortably with some cushion for other potential expenses (think repairs, upgrades, life events, etc.).
Also take into account any other types of loans you may have to make sure you are not stressing your budget with too much house debt. Aside from that, do your research and ensure that you understand your mortgage offer.
Happy house hunting.