Find the Best Mortgage Lenders

To narrow it down from the mortgage lenders listed on this guide, we first looked at customer reviews. We required companies to have an overall satisfaction rating above 3.5 stars plus a 2:1 ratio of 5-star to 1-star reviews. The ConsumerAffairs research team also considered availability — all of the top picks are available across the country.

• Our top pick overall: AmeriSave Mortgage
• Our pick for refinancing: Mr. Cooper
• Our pick for first-time buyers: Caliber Home Loans
• Our pick for easy process: Rocket Mortgage
• Our pick for mobile home loans: Vanderbilt Mortgage
• Our pick for VA loans: Veterans United
• Our pick for fully online process: First Internet Bank

AmeriSave is a direct lender in 49 states (currently unavailable in New York), plus Washington, D.C. Fixed and adjustable rates with a range of closing cost options are available. We like that you can get real quotes — not estimates — in just a few minutes online.

What reviewers say: Helpful loan officers, fair rates and terms, super easy process

Mr. Cooper offers refinancing options to lower your payments, get cash out or consolidate debt. You can track changes in your home value and equity through an app. We also like that the company offers a “close on time” guarantee.

What reviewers say: Smooth process, rates could be a little lower, very responsive reps

Caliber is a private, national mortgage company that offers purchase and refinance loans in all 50 states. Fixed-rate mortgages in terms ranging from 10 to 30 years (instead of the typical 15 or 30) are available. Many first-time homebuyers seem to like Caliber because of the personalized support.

What reviewers say: Great to work with, minimal out-of-pocket expenses, quick and easy process

Rocket Mortgage is an online mortgage company developed by one of the largest lenders in the U.S., Quicken Loans. The application and approval process is streamlined, and homeowners can continue to manage their mortgages online after closing.

What reviewers say: Amazing rates and fees, friendly and knowledgeable reps, fast and easy refinancing

Vanderbilt Mortgage is a housing lender specializing in manufactured and modular home financing. The company offers a few unique mortgage products, including portfolio loans, which are nongovernment loans with fewer requirements.

What reviewers say: Clear, concise and friendly reps, smooth approval process, detail-oriented loan specialists

Veterans United specializes in purchase and refinance loans for eligible vets, service members and military spouses. Through the VA Energy Efficient Mortgage program, borrowers can finance an extra $6,000 to pay for qualified home improvements.

What reviewers say: Helpful and friendly team, simple refinance process, good for first-time homebuyers

First Internet Bank offers conventional, government and jumbo home loans. Once all documents are signed and uploaded, most transactions close within 40 days. The lender works with a national network of closing agents and attorneys to complete loan closings.

What reviewers say: Excellent customer service, competitive rates, simple refinance process

A mortgage is a loan that's used to buy real estate, typically residential property. The purchased property also serves as collateral for the loan. Unless you have enough cash on hand to purchase a house outright, a mortgage is a legal document you must sign to buy or refinance a property.

Conventional mortgages require a minimum 620 credit score.

Conventional mortgages require a minimum 620 credit score.

The word “mortgage” comes from the Old French phrase “mort gage,” which means “death pledge.” With a mortgage, the borrower is obligated to pay the full debt amount, or figuratively “kill” the loan. In this sense, “death” refers to the debt and “pledge” is a surety or promise. A mortgage is also sometimes called a lien against property, claim against property or deed of trust in some states.

Of all the different types of mortgage loans, conventional and government-backed mortgages are most frequently used to finance a home. Government-backed mortgage loans — FHA, VA and USDA programs — typically require credit scores higher than 580 and down payments from 0% to 3.5%. Since conventional loans are riskier for lenders, most require credit scores of 620 and 5% to 20% down payments. For more information, learn what a mortgage is and how it works next.

How does a mortgage work?

A mortgage functions as a lien or legal claim against a property. In exchange for immediate funds, the borrower must repay the loan with interest and fees over time. The financed property serves as collateral for the loan — if mortgage debt is not repaid, the bank or creditor has the right to repossess the property.

To get a mortgage, you must sign a legal agreement that gives your home loan lender the right to take the property if you don’t repay your loan. You also must sign a promissory note stating that you agree to repay the mortgage loan in full, with interest and under your lender’s repayment terms. Lenders evaluate your debt-to-income ratio to determine how well you manage your debts — borrowers with debt-to-income ratios above 43% are typically considered risky and may not qualify for a mortgage loan.

Mortgage amortization is the process of paying down home loan debt over time. Homeowners build equity by making payments on their mortgage principal. If you get a second mortgage, you borrow funds with your house as collateral for the loan but don’t have to use the funds to purchase a home. Home equity loans and lines of credit are types of second mortgages.

How does mortgage interest work?

Mortgages come with different loan terms and interest rates. The term refers to the life span of the loan, which is usually between 15 and 30 years. The mortgage rate refers to the amount of interest the lender charges in exchange for the loan.

Mortgage rates can be fixed or adjustable. A fixed-rate mortgage has the same interest rate for the entire term, whereas an adjustable-rate mortgage increases or decreases based on a changing index. The most popular type of adjustable-rate mortgage is the 5/1 ARM, which has a fixed rate for the loan's first five years and then can adjust each year after that.

Mortgage rates and terms have the most impact on how much you’ll pay over the life of the loan.

How does refinancing work?

Mortgage refinancing companies replace your existing mortgage with a new loan. The two most common types of home refinance loans are rate-and-term refinancing and cash-out refinancing.

Through rate-and-term refinancing, you can change your term, get a new rate and pick a new type of loan and lender. Rate-and-term refinancing doesn’t affect your principal balance, and it’s possible to save on interest in the long term if rates have gone down since you first financed your mortgage.

With a cash-out refinance, you access your home equity in exchange for a higher principal. For example, imagine you owe $50,000 on your mortgage and want a $10,000 loan. Through a cash-out refinance or home equity loan, you could accept a $60,000 loan and receive $10,000 in cash after closing.

Many homeowners refinance their mortgage to lower their monthly payments, get a better rate, convert home equity into cash or pay off their loan faster. Some mortgage refinance lenders also specialize in debt consolidation strategies. For more, read about how to refinance a mortgage.

There are many places to find a mortgage — national and regional banks, local credit unions and online mortgage lenders or brokers — so it can be confusing to know the best place to look or where to start.

What is a mortgage broker?

A mortgage broker is the middleman between a borrower and a wholesale mortgage lender. Hiring a mortgage broker to help compare multiple lenders can save time and money, but brokers earn higher commissions on more expensive loans — keep in mind that they might not always have the borrower's best interests in mind. Mortgage broker fees are up to 1.5% to 2% of the total real estate loan.

What is a mortgage lender?

A mortgage lender is the banking institution that finances the home loan for a fee. Mortgage lender origination and closing fees vary by lender and from state to state. Mortgage banks and portfolio lenders are types of direct mortgage lenders. Direct lenders process applications and originate and underwrite loans. A lender is different from a mortgage servicer, which processes loan payments, responds to borrower inquiries and manages escrow accounts.

The average mortgage is $840 to $1,200 per month. Most financial experts suggest keeping your mortgage payment below 30% of your monthly gross income and your total debt-to-income ratio lower than 36%. Use our mortgage calculator to determine how much house you can afford.

Keep in mind that the total cost of a mortgage is more than just the price of your house. As you compare mortgage companies, consider closing costs, mortgage points and prepayment penalties.

• Down payment: A down payment is the percentage of the total sale price that you put down upfront. Down payments can vary by loan type, location and lender. Mortgage insurance is typically required when you make a less substantial down payment.
• Closing costs: Closing costs amount to 2% to 5% of the home loan and include application fees, lender fees, attorney fees, escrow deposits and fees, courier fees, homeowners association transfer fees, inspection fees and title insurance.
• Mortgage points: Sometimes called discount points, mortgage points are optional fees paid to your lender in exchange for a lower interest rate. Each point costs 1% of the mortgage loan amount.
• Prepayment penalties: A prepayment penalty is a fee that some lenders charge when a borrower pays their mortgage loan off early, either through refinancing or overpaying each month. The average prepayment fee is 80% of six months of interest.

What makes up a monthly mortgage payment?

Once you’ve covered all the upfront costs of a home loan, your monthly mortgage payments include principal, interest, taxes and insurance. In some cases, other regular expenses include homeowners association or condo fees.

• Principal: The principal is the balance of the loan amount you borrowed. Each month, your mortgage payment reduces the principal.
• Interest: Interest is the amount you agree to pay your lender in exchange for a mortgage loan. Fixed interest rates stay the same throughout the term of the loan. Adjustable interest rates can vary over the life of the loan.
• Property taxes: Property taxes are often included in mortgage bills. Lenders keep your property tax payments in an escrow account until they're due and then pay them on your behalf.
• Mortgage insurance: Mortgage insurance protects the lender if you stop making payments on your loan. The two types of mortgage insurance are private mortgage insurance (PMI) and mortgage insurance premiums (MIP). For conventional mortgages, you can avoid the need to pay for PMI by making a down payment of 20% or more. For FHA and other government-backed loans, you can avoid MIP after 11 years by putting at least 10% down.
• Homeowners insurance: Homeowners insurance covers damage from fire, storms, theft and other perils. Most lenders require homeowners insurance and charge premiums on your mortgage bills.

How to get the best mortgage rate

The easiest way to get the best interest rate is to compare multiple mortgage lenders and refinancing companies, according to the Consumer Financial Protection Bureau (CFPB). Other tips for getting a great mortgage deal include improving your credit, making a larger down payment, buying mortgage points and selecting an adjustable-rate mortgage loan.

• Compare all mortgage options: As you shop around, get quotes from at least three lenders and be sure to consider all your loan options — for example, USDA loans are ideal for those who live outside of an urban community. Remember that you can also negotiate with lenders to get better deals.
• Improve your credit score: To get the best interest rate on your mortgage, you need to have excellent credit. Take the time now to pay off your credit cards and don’t take out any new loans while you’re getting ready to apply for a home loan.
• Make a larger down payment: A larger down payment often gets you a lower interest rate. Try to save up for a 20% down payment to avoid having to pay private mortgage insurance (PMI). If you can’t put down 20%, aim for at least 5% — that's where you start seeing a decrease in interest rates.
• Consider mortgage points: Mortgage points are optional upfront payments that reduce your interest rate. One point typically costs 1% of the loan. When interest rates are high, buying mortgage points can save you money in the long term.
• Go for the ARM: You can usually get a better upfront mortgage rate by getting an adjustable-rate mortgage (ARM) rather than a fixed-rate mortgage. Keep in mind, though, that your monthly payments may increase after the fixed-rate period ends if you opt for an ARM.

After you’ve checked your credit score, figured out how much house you can afford and researched the best mortgage lenders, it’s time for some paperwork. The application process varies depending on preapproval status and other factors, but everyone who applies for a mortgage generally goes through these five steps:

Mortgage lenders in your city can help you with the ins and outs of the local market. We looked at our favorite companies across the U.S. to help you find a mortgage company near you.

• Albuquerque
• Atlanta
• Austin
• Bakersfield
• Baltimore
• Boise
• Chicago
• Cincinnati
• Cleveland
• Dallas
• Denver
• Detroit
• Fort Myers
• Green Bay
• Houston
• Indianapolis
• Kansas City
• Lansing
• Las Vegas
• Los Angeles
• Milwaukee
• Nashville
• Omaha
• Orlando
• Phoenix
• Pittsburgh
• Portland
• Sacramento
• San Diego
• San Antonio
• Tallahassee
• Tampa
• Tucson
• Tulsa
• Waco
• West Palm Beach