Best bad credit home loans in {year}
You can buy a house with bad credit, but you’ll need to prove financial responsibility. These lenders can help if your credit is less than perfect.
Ashley Eneriz
Buying a home is one of the most significant purchases you’ll make, and the mortgage process is often cumbersome. However, with many lenders, you can now complete the entire qualification and application process online. You may even be able to complete parts of the appraisal and closing digitally.
The best online lenders offer low fees, a quick timeline, an easy-to-use app or website and a variety of mortgage types.
Rates are effective 09/30/2023 and are subject to change without notice. APR shown is provided by a partner of ConsumerAffairs.
Product | APR | |
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7.935%-0.02% | Get Rates | |
The APR shown of 7.935% is available for a 30-year fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%. | ||
7.906%-0.02% | Get Rates | |
The APR shown of 7.906% is available for a 20-year fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%. | ||
7.014%0.01% | Get Rates | |
The APR shown of 7.014% is available for a 15-year fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%. |
6.635%0.0% | Get Rates | |
The APR shown of 6.635% is available for a 10-year fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%. | ||
7.726%-0.01% | Get Rates | |
The APR shown of 7.726% is available for a 30-year FHA fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%. | ||
7.565%0.06% | Get Rates | |
The APR shown of 7.565% is available for a 15-year FHA fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%. | ||
6.856%0.04% | Get Rates | |
The APR shown of 6.856% is available for a 30-year VA fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%. | ||
6.723%0.1% | Get Rates | |
The APR shown of 6.723% is available for a 15-year VA fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%. |
Product | APR | |
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8.281%0.15% | Get Rates | |
The APR shown of 8.281% is available for a 30-year fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%. | ||
7.891%0.0% | Get Rates | |
The APR shown of 7.891% is available for a 20-year fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%. | ||
7.034%0.15% | Get Rates | |
The APR shown of 7.034% is available for a 15-year fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%. |
6.475%0.0% | Get Rates | |
The APR shown of 6.475% is available for a 10-year fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%. | ||
7.663%0.0% | Get Rates | |
The APR shown of 7.663% is available for a 30-year FHA fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%. | ||
7.188%0.0% | Get Rates | |
The APR shown of 7.188% is available for a 15-year FHA fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%. | ||
7.338%0.2% | Get Rates | |
The APR shown of 7.338% is available for a 30-year VA fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%. | ||
7.018%-0.01% | Get Rates | |
The APR shown of 7.018% is available for a 15-year VA fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%. |
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An online mortgage lender is a good choice if you’re moving to a new city, prefer a faster approval or closing or want a more streamlined process. With so many options, it can be hard to choose a lender. But our list is a good place to start.
The ConsumerAffairs Research Team scored mortgage companies based on recent reviews, online reputations and digital features. Below, we summarize what makes each of our top picks different, discuss loan requirements and cover a few strengths and weaknesses. Read our full methodology for more on how we ranked lenders.
Our picks may be Authorized Partners who compensate us. This does not affect our recommendations or evaluations but may affect the order in which companies appear.
Launched in 2015, Rocket Mortgage is the flagship business of Rocket Companies, which also provides personal loans, auto loans and solar financing. It offers a completely or mostly online application process (depending on your state) from preapproval to closing, for all of its mortgage products, including government-backed and conventional loans.
Rocket Mortgage loans are available in all 50 states and Washington, D.C., to borrowers with a range of credit scores, including those with lower scores. It also offers a 90-day rate lock program, RateShield.
While there are many incentives to get a mortgage with Rocket Mortgage, if you’re looking for a U.S. Department of Agriculture (USDA) loan or a home equity line of credit (HELOC), you’ll need to use another lender; Rocket Mortgage does not offer those.
Customer support is available via email, live chat and phone seven days a week.
“I tried several other lenders, but they wanted so much paperwork and had such high closing costs it was not worth it,” said Patricia from Graham, North Carolina. “Most did not understand life is online and would not accept anything but old-fashioned paper. Rocket understood that everything is online today. They wanted documents uploaded, not mailed. They understood I don't get pay stubs but could provide all the information online through a different format.”
Nbkc bank is primarily an online bank, but it has branches in Kansas City, Missouri, as well as Overland Park and Leawood, Kansas. In addition to checking accounts, credit cards, personal loans and auto loans, it offers mortgages, refinancing and HELOCs — although HELOCs are available only to residents of the Kansas City metropolitan area. While the application process for nbkc mortgages is done entirely online, nbkc offers personalized service from expert loan officers.
Mortgage options include conventional, Federal Housing Administration (FHA) loans and U.S. Department of Veterans Affairs (VA) loans in all 50 states. The bank also offers a unique Pilot Program to support airline pilots who often struggle to secure lending due to unpredictable pay schedules.
While nbkc bank receives solid reviews from customers for its application ease and customer service, it may not appeal to those outside the Kansas City area, given its limited branch presence.
Customer support is available via email, phone and live chat.
“The process was very painless, and making the docs digitally available was a great plus (not a lot of paper clutter),” said Eugene from San Diego.
Gregory from Tucson, Arizona, said of his nbkc loan officer: “He put up with my odd questions and was very patient and helpful. This continued throughout the process as we locked in and closed with nbkc. He took the time to understand our needs/strategy while also helping us solidify on that goal.“
Founded in 2014 with the purpose of making homeownership more transparent and less stressful, Better doesn’t charge any application, origination or underwriting fees. It says it has funded $100 billion in home loans to date.
Better offers both fixed and adjustable rates for conventional and jumbo loans. It also offers FHA and VA loans, but not USDA loans.
One of Better’s most appealing deals is that it gives up to $3,500 in credits toward refinancing costs if a customer refinances with Better within six to 36 months of closing on a Better mortgage loan. HELOCs are available for up to $500,000.
Better also connects borrowers with real estate agents and attorneys, offers title insurance and provides home improvement loans. Its One Day Mortgage promises that users can lock in a rate and get a loan commitment letter within 24 hours. Its Better Price Guarantee aims to improve upon the loan offer of “any valid competitor” by at least $100. If Better can’t do that, it will give you $100 instead.
Customer support is available 24/7 via phone, email and live chat.
Dassy from Rockford, Illinois, noted that “Better Mortgage has a good online system. It's very easy to use.” Sean from Kansas City, Missouri, said: “The process was great. … Also, the rate and terms were what I was looking for.”
“Best online mortgage experience I ever had,” said Lakeshia from Meridian, Mississippi. “My home purchase was unique and very frustrating when it came to the sellers, realtor and closing attorney. However, Better was right there making sure things got done and that I closed on time.”
Based in Dallas, Texas, Mr. Cooper is one of the largest mortgage lenders in the U.S., with over four million customers nationwide. It is an online lender that offers both fixed- and adjustable-rate mortgages as well as cash-out refinancing. Loan options include conventional loans, FHA loans, FHA Streamline Refinance, VA loans and jumbo loans of up to $2.5 million.
Mr. Cooper offers instant preapproval that’s valid for 120 days, as well as a verified approval letter by the next business day. It also offers a Close On Time Guarantee, which will cover your first month’s mortgage payment should there be a delayed closing (some exceptions apply).
Customer service is available via live chat with an online account or via phone.
“Working with Mr. Cooper is effortless and efficient,” said Nickey from Black Hawk, Colorado. “Their mobile app is my saving grace for keeping up with my mortgage, keeping tabs on my area for pricing and keeping me organized.”
Jason from Midlothian, Virginia, said: “My favorite aspect was their website and mobile app. It’s clear they spent a lot of time and effort on these, and the resulting attention to detail shows that they nailed it.”
“Everything was over the phone or on the app and everything went really well,” said Herman of Seymour, Tennessee. “I got pretty decent rates. It wasn't the cheapest, but I felt that if you're with Mr. Cooper, it was worth it.”
Though it’s perhaps better known for its real estate listings and mortgage marketplace, Zillow now offers its own direct mortgages, a result of its acquisition of Mortgage Lenders of America in 2018. Zillow mortgages include conventional, VA and FHA loans, as well as refinancing. Pre-qualification can be done in as little as three minutes, with no hard pull on your credit score.
During pre-qualification, you’ll be walked through a series of questions about where you are in your home-buying journey and how much you’re planning to spend. You’ll then fill out your contact details, and someone from Zillow will contact you.
Zillow Home Loans provides a variety of calculators on its website to help you determine things like monthly mortgage payments, how much home you can afford and whether you should refinance your mortgage. It also presents clear, helpful examples of potential loan amounts, showing different term lengths and interest rates.
Customer service is available via phone and online contact form.
For instance, Karissa from New Britain, Connecticut, said her loan officer “explained the process in detail … and gave examples from his personal and professional experience that gave me reassurance in the process.”
Ericka of Glen Allen, Virginia, said, “At each and every step in the process, I was impressed: from the initial call that resulted immediately after I completed the simple form online … to the ease of required documentation by loan processor, Tiffany, and finally, the document signing was a notary right to my doorstep!”
Morty is an online mortgage marketplace, and its goal is to make the home financing process more accessible and efficient. Users create an online account, then Morty’s interactive quote tool provides personalized loan options. Preapprovals take just a few minutes, and once you have an accepted offer, you can lock in the loan directly through the Morty platform. Morty says it has processed over $1.2 billion in loans to date.
The Morty platform offers conventional 15-, 20- and 30-year fixed-rate mortgages, as well as adjustable-rate mortgages. It also supports FHA and HomeReady loans for people with lower credit scores or income, as well as jumbo loans up to $2 million. While the platform does not directly support VA or USDA loans, it can connect users to partners that deal with those programs.
Morty’s Closing Date Promise waives appraisal fees for transactions delayed up to 24 hours and also provides mortgagors with a $2,000 Visa gift card for delays beyond that. Its Quick Close Advantage expedites the closing process to a period as short as 14 business days.
Customer service is available via email and phone.
Jeraldyne from Tobyhanna, Pennsylvania, said: “I loved the whole process with Morty. It was amazing. The people helping me were very communicative. They reached out every time they needed something for me and could answer every question I had, too. I sent the paperwork, and within that day, they would put it in the system, and I could track everything on the website.”
Other reviewers praised the quality of Morty’s online platform. Constantine from Fairfax, Virginia, noted: “The website was clean, and it was clear to use. It was a polished experience, so I felt comfortable with moving forward with Morty.”
New American Funding is a direct lender with a specific focus on underserved communities. Its Latino Focus initiative addresses the unique challenges that Hispanic homebuyers face, and its New American Dream initiative aims to increase homeownership in Black communities. New American Funding says that in 2021, 33.3% of its loans went to minority borrowers.
The lender also has a focus on homebuyers who serve or have served in the military. Its Military Heroes Focus initiative aims to increase homeownership for active military members, veterans and their families.
New American Funding offers 15- and 30-year fixed-rate mortgages, as well as adjustable-rate mortgages. Loan options include conventional, FHA, USDA, VA and jumbo loans, as well as reverse mortgages. Its I CAN mortgage aims to serve borrowers’ individual needs by offering repayment terms of eight to 30 years and down payments as low as 5%.
Customer service is available via phone, email and an online customer care portal. There are also in-person branches throughout the U.S.
Others liked the customer service and communication. “I was skeptical using an online company, but New American Funding provided me with excellent service, great communication and eased all of my concerns about working with an online mortgage company,” said Rebecca of Howell, Michigan.
An online mortgage is the same as a traditional mortgage you apply for at a brick-and-mortar bank, but everything (or almost everything) is done digitally; you won’t need to set foot inside an office for most or all of the process. While most traditional lenders allow for at least part of the mortgage application process to be handled online, some lenders, such as Better Mortgage, operate exclusively online.
You can apply for most types of home loans online, including conventional loans and mortgage refinancing.
Note that if you are a nontraditional buyer, which includes those who are self-employed, retired, have poor credit or need a jumbo loan, you might have a more difficult time getting an online mortgage.
» MORE: Best Mortgage Lenders
If you’re shopping for a mortgage, it’s important to understand the different types of lenders you might encounter. These are some of the most common types:
Note that there are other types of lenders, such as wholesale lenders, whom you might also encounter. Before signing a mortgage, make sure you understand the nuances of the type of lender you’re working with.
» MORE: Mortgage broker vs. lender
Applying for a mortgage online isn't that different from applying at a local bank. The main difference is that, with an online mortgage, the application process is handled digitally. For instance, you’ll have to upload PDFs of important documents, and you can track your loan's progress through an app or secure online portal.
Other than that, you’ll follow the usual steps to getting a mortgage. This includes deciding what type of mortgage you’re looking for; comparing different lender options, rates, and terms; and figuring out how much house you can afford.
Once you’ve selected a lender, you’ll need to complete an application and submit all necessary documentation, including your:
If you’re a first-time homebuyer, lenders may ask for your renting history. The lender will also pull your credit report and check your credit score.
After the lender reviews your documentation and application, you’ll receive your approval and sign your loan agreement digitally. However, some lenders might require you to attend an in-person closing, so make sure you ask about that ahead of time.
» MORE: How to get a mortgage
Before deciding to apply for a mortgage with an online lender, compare the pros and cons. For instance, with an online lender, you can apply at your own convenience and pace. It’s also easier online to compare interest rates, loan terms, fees and other features across multiple lenders. Approvals and closing are often faster online too.
On the other hand, you might get less personalized service from an online lender. If you have an atypical employment situation or uneven credit history, you might not qualify for a mortgage from an online lender. Additionally, the rates ultimately offered to you may not be as low as advertised rates, which may only be reserved for the most qualified borrowers.
When selecting an online mortgage lender, you’ll want to compare the different options based on features including:
Keep in mind that while online lenders can theoretically make the process of applying for a mortgage more convenient, the process could actually be more difficult and frustrating if a lender has unresponsive customer service or a complicated website. If you’re someone who likes in-person service or who is uncomfortable with all-digital processes, you may prefer a brick-and-mortar lender instead.
Yes, you can get a mortgage with bad credit, though you may not get very good rates. Government-backed loans typically have the most lenient credit score requirements. For example, FHA loans are available to borrowers with credit scores as low as 580.
In general, reputable online mortgage lenders with secure websites are considered safe.
However, it’s crucial to thoroughly research lenders, especially online lenders, to determine if you can trust them. Compare lender reviews from previous borrowers and ask your friends, family or real estate agent for suggestions. Avoid any lender with unusually high rates or fees or one that pressures you to sign documents quickly.
Your buying power is primarily determined by your income, savings, debt and other personal financial factors. However, working with a good online lender can significantly impact how much house you can afford if that online lender offers a better interest rate than traditional lenders. A common rule of thumb to keep in mind is that a 1% decrease in your mortgage’s interest rate gives you roughly 10% more buying power.
Different lenders will also require different down payment amounts. Most lenders require between 3% and 20% of the home’s price, although some programs (USDA and VA, for example) do not require a down payment at all.
You’ll also have to account for escrow, closing costs and origination fees. Keep in mind that principal, interest, taxes and insurance (PITI) make up your total mortgage payment each month.
Not necessarily. Online lenders can have lower overhead costs than brick-and-mortar lenders, which can sometimes (but not always) mean lower rates and fees. But in some cases, you could pay more for the online convenience. It’s important to shop around and compare a variety of lending options before committing to anything.
Interest rates vary across lenders. However, online mortgage lenders can usually offer better rates than their traditional counterparts. But as with any financial decision, it’s important to compare rates from a few different lenders to ensure you’re getting the best rate and terms possible for your borrower profile.
An online mortgage lender can be just as legit and safe as a traditional mortgage lender. The primary difference is how you complete the application process. If you prefer a digital application with potentially quicker processing times and don’t mind the lack of face-to-face service, an online mortgage is a good way to secure funding for your new home (as long as you meet certain borrower requirements).
Make sure you compare different online lenders before choosing one; the lenders on this list are a good place to start if you’re overwhelmed with all the available options. Additionally, take the time to carefully read all the terms and conditions before signing the loan agreement.
The ConsumerAffairs Research Team started with a list of 60 mortgage companies. We first eliminated those with an overall satisfaction rating below 3.5 stars on our site, leaving 40.
To narrow it down again, we required companies to have at least twice as many 5-star reviews as 1-star reviews over the last year (Dec. 8, 2020, through Dec. 8, 2021), leaving 14. In total, we analyzed 6,245 verified reviews.
We then graded the remaining lenders and brokers on availability, online reputation and digital features, such as free online quotes, easy-to-navigate applications and the option to make monthly payments through a secure portal. Rankings are based on weighted scores, similar to a grade-point average.
Once we selected our top picks, we vetted each through the NMLS Consumer Access portal and confirmed that they have a secure website.
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