Best Mortgage Lenders of 2024

• Best overall: AmeriSave Mortgage
• Best customer service: Better
• Best loan variety: New American Funding
• Best for low rates: Rocket Mortgage
• Best for flexible credit requirements: Lower
• Honorable mention: Network Capital
• Honorable mention: 21st Mortgage Corporation

Honorable mentions

The process of buying a new home can feel daunting, but getting your new keys is also incredibly rewarding.

This mortgage lenders buyers guide will help you understand the different types of mortgages, compare lenders and explain what you need to know about getting preapproved and financially ready to make an offer.

What is a mortgage?

A mortgage is a loan for purchasing real estate. With this type of loan, you borrow money from a lender (typically a bank, credit union or mortgage company) specifically for financing the purchase of the property.

The property itself serves as collateral — an asset the lender can repossess through the foreclosure process if you default on the loan. In these cases, the borrower repays the loan amount plus interest over an agreed-upon period, often spanning several years or decades.

» MORE: Homeownership statistics by state

Types of mortgages

The two main types of mortgage loans are conventional and government-backed mortgages.

Conventional loans

Conventional loans are private loans not insured by the government. There are two types of conventional loans: conforming and nonconforming.

• Conforming: These must meet Fannie Mae and Freddie Mac requirements. The guidelines include a maximum loan amount and minimum borrower requirements (such as a maximum debt-to-income ratio and minimum credit score) to make them safe investments for individuals and institutions. In 2024, the maximum conforming loan limit in most of the country is $766,550.
• Nonconforming: These loans do not meet the Fannie Mae or Freddie Mac requirements. The lender of a nonconforming loan is required to set its own guidelines and limitations. Jumbo loans are nonconforming loans with amounts exceeding the conforming loan limit. You need good credit (often 700-plus) and a large down payment for eligibility.

Government-backed loans

When a government entity backs a loan, it’s less risky for a private lender. This often translates to greater savings and less strict credit requirements for the borrower.

• FHA: The Department of Housing and Urban Development (HUD) Federal Housing Authority backs FHA loans, which offer lower down payment options for borrowers with less-than-perfect credit.
• VA: Partially backed by the U.S. Department of Veterans Affairs, VA loans offer a low- or no-down-payment option and less strict credit requirements for U.S. military veterans, service members and their surviving family members.
• USDA: Backed by the U.S. Department of Agriculture's Rural Development Guaranteed Housing Loan program, a USDA loan offers a low- or no-down-payment option for homebuyers purchasing in rural areas.

There are other mortgages available that do not fall under these typical categories, such as a home renovation loan, home equity loans and home equity line of credit (HELOC).

What’s the ideal term length for a mortgage?

The most common mortgage terms are 15 and 30 years, though you can also get 20-year loans and terms shorter than 15 years.

Shorter-term mortgages typically have higher monthly payments but lower interest rates, which lets you pay off your loan more quickly — and save money in the long run.

Longer-term mortgages tend to have lower monthly payments but higher interest rates, making them more manageable over time but ultimately more expensive. The best choice depends on your financial goals and ability to afford higher monthly payments.

» MORE: 15- vs. 30-year mortgage

How to choose a mortgage lender

You’ll first need to decide the type of mortgage (conventional or government-backed) and the type of rate (fixed vs. adjustable) you prefer. You’ll also need to look at how long of a term you want (e.g., 15 or 30 years). Then you can use the following checklist:

• Research down payment options: While it’s considered typical to put 20% down on a house to avoid PMI, some lenders allow down payments as low as 5% (government-backed loans allow for even lower down payments).
• Look into lender fees: In addition to closing costs, look at what fees you’ll need to pay to secure your mortgage. These may include fees for lawyers, homeowners associations, property taxes or loan origination.
• See if buying mortgage points is an option: Find out if the lender offers the option to buy mortgage points. These points can help you buy down the interest rate on your loan.
• Understand the application process: Can you apply completely online or will you have to do it in person? Depending on where you live, where you’re purchasing a home and any accessibility concerns, how you apply for a mortgage can make a difference.
• Research average approval times: How long will it take for the lender to approve your application? And, once approved, how long will it take to close? If you need a quick approval and closing, make sure the lender can meet that time frame.
• Read reviews and research customer service: It’s important to read customer reviews when selecting a lender to ensure the company is responsive, knowledgeable and friendly. Having a dedicated loan officer will make the financing process much more enjoyable and less stressful.

You want to compare lenders and offers to make sure you’re getting the best loan for your needs. You might want to work with a mortgage broker, which can help you compare rates and terms from the top mortgage lenders so you can find the best deal.

» MORE: Mortgage broker vs. lender

What to know about fixed and adjustable rates

With a fixed-rate loan, your interest rate remains the same throughout the life of the loan.

With an adjustable-rate mortgage (ARM), your loan has a fixed interest rate for an initial period, but the interest rate eventually adjusts based on market conditions.

Mortgage requirements

Mortgage requirements vary depending on the loan type you apply for, but most lenders require the following:

• A good credit score: This is set by the lender or loan type, but the higher your score, the better mortgage interest rates you will receive.
• Proof of income and employment: You will need to provide proof of steady income and employment, such as pay stubs, tax returns and W-2 forms.
• Low debt-to-income (DTI) ratio: This is the ratio of your total monthly debt payments to your gross monthly income. The best mortgage lenders typically prefer a maximum DTI ratio of 43%.
• Down payment: The minimum down payment amount can vary significantly based on the type of loan and your credit score.

How much do you need for a down payment?

You can get a conventional home loan with as little as 3% down and an FHA loan with as little as 3.5% down. USDA and VA loans do not have down payment requirements, so borrowers can put nothing down and still qualify for a home loan.

The good news is that you don’t need 20% for your down payment. In fact, the 20% down payment is only recommended to avoid private mortgage insurance (PMI).

For FHA borrowers with credit scores between 500 and 579, you will be required to put 10% down.

» READ MORE: How much is PMI?

What credit score is needed for a mortgage?

Conventional loans require a minimum credit score of 620, but lenders may require a higher score (or a higher down payment if your score is around the 620 range).

USDA and VA loans do not have a minimum credit score, so you’ll have to check with your lender about specific requirements. If you qualify for an FHA loan, you’ll have more credit score flexibility — with these loans, you can have a score as low as 500 and still qualify for a home.

Steps to take before applying for a mortgage

Take these steps before reaching out to lenders to ensure a smoother application process with fewer surprises.

1. Save for a down payment: Having a substantial down payment can improve your loan terms and potentially eliminate the need for private mortgage insurance (PMI). Start saving as early as possible and consider setting up a dedicated savings account for your down payment to track your progress.
2. Check your credit score: A higher credit score typically results in better interest rates and more loan options. If your score is lower than you'd like, take steps to improve it, such as paying down existing debt, avoiding new credit inquiries and addressing any errors on your credit report.
3. Reduce your debt-to-income ratio: To improve your DTI, focus on paying off high-interest debts and avoid taking on new financial obligations in the months leading up to your mortgage application.
4. Gather documents: Lenders will request various financial documents, including pay stubs, tax returns, bank statements and proof of employment. Organizing these documents in advance can speed up the application process and demonstrate your financial stability.
5. Research mortgage options: Understanding the different types of mortgages available can help you choose the one that best fits your financial situation. Research the different loan options you qualify for and decide what works best for you.

How to apply for a mortgage

Applying for a mortgage can seem like a daunting prospect, but breaking it down into steps makes it more manageable.

1. Evaluate your financial situation: This means understanding your credit score and any potential credit challenges a lender may spot.
2. Search for a mortgage lender: Shopping around and comparing the best mortgage lenders helps you find the lowest mortgage rates, most manageable repayment terms and a lender you’re comfortable working with.
3. Apply online and get prequalified: Online applications can speed up the process and nail down a monthly payment range you’re comfortable with. Prequalification lets you know how much money you might qualify for without a hard credit check.
4. Review your preliminary mortgage options and make a selection: Your lender may offer more than one loan option, which means you can calculate different scenarios for your budget.
5. Get preapproved: A preapproval is when a lender shows you the exact interest rate you will receive and the exact amount you can borrow. At this point, the lender will run a credit check. The preapproval process can take anywhere from a day to 10 business days, so it’s best to get started as soon as possible.
6. Find a property and make an offer: With a prequalification or preapproval letter in hand, you can stand out amongst buyers as someone who is serious about purchasing.
7. Receive final loan approval: The lender will require an extensive set of documents for final approval. Submitting these documents on time can expedite the closing process.
8. Close your loan: It’s time for signing the paperwork and making the down payment (if applicable). Typically you work with both a lender and real estate attorney during this final step.

Most lenders offer an online application option, which can help speed up the process, but if you prefer an in-person experience, you should take this into consideration when selecting a potential mortgage lender.

» MORE: What is a closing disclosure?

How to get preapproved for a mortgage

Getting preapproved shows sellers that you’re a serious buyer and gives you a clear idea of how much house you can afford. The process is quick and can typically be done in person, online or over the phone with a mortgage lender. Be prepared to give the lender the following information:

• Personal information (name, address, phone number, state ID, Social Security number, etc.)
• Pay stubs
• Tax returns and W-2s
• Bank statements
• Documentation of any other sources of income (such as bonuses, alimony or freelance work)
• Information on existing debts (e.g., credit cards, student loans, car loans)

If you’re approved, the lender will provide a preapproval letter that states how much you’re qualified to borrow and the interest rate you’re likely to receive. This letter is usually valid for 60 to 90 days and can be a powerful tool when making offers on homes — it shows sellers you’re financially prepared to move forward with the purchase.

How are mortgage rates determined?

Mortgage rates are affected by the following:

• Buyer’s creditworthiness
• Loan-to-value (LTV) ratio (i.e., the loan cost compared with the appraised value of the property)
• The loan term length
• The size of the down payment
• Market conditions
• Market competition

As Shmuel Shayowitz, president and chief lending officer at Approved Funding, put it: “Mortgage rates are influenced by a combination of factors, and understanding these factors can help buyers secure the best mortgage rate, even in a high-rate environment.”

Shayowitz said that buyers can get the best rate by improving their credit score and increasing their down payment. Additionally, he recommended buying points.

“Buyers can choose to pay points upfront to reduce their mortgage rate,” he said. “Each point is typically equal to 1% of the loan amount. By paying points, buyers can effectively buy down their rate.”

Is it a good time to get a mortgage?

The real estate market is constantly fluctuating and looks vastly different depending on where you’re looking to buy. Because of that, it’s hard to determine when it’s a “good” time to get a mortgage.

Rates are currently elevated, inventory continues to remain low and demand is high in most areas. If rates drop (they are trending lower in 2024), more buyers will qualify for loans, making the competition and chance of bidding wars increase.

Best housing markets in 2024

If you’re looking to buy a new home but don’t know where to get the best return on investment,  ConsumerAffairs has you covered. Our research team compared all U.S. states and 477 of the most populous metro areas across four categories — stability, growth and risk, affordability, and fluidity — to rank the healthiest housing markets in 2024.

Here’s how the states stack up:

Our team also looked at the same factors for 477 of the most populous U.S. metropolitan areas. Here’s how they stack up:

To determine our five top picks, including our pick for the best overall mortgage company, we used a weighted scoring system that took into account both reviews about each company from ConsumerAffairs users and specific company offerings we researched.

We conducted sentence-by-sentence sentiment analysis of thousands of reviews on our site from Oct. 1, 2021, to Sept. 30, 2024, to identify the aspects people care about most — and which companies reviewers were happiest with in terms of these aspects. For mortgage, these included:

• Staff
• Loan process
• Customer service

We then carefully selected the most important offerings consumers should consider before choosing a lender and researched these offerings at each company. For mortgage, these features included:

• Variety of loans
• APRs
• Guarantees
• Credit score requirements

The company with the highest score in each category’s uniquely weighted formula was given the “Our pick for” or “Best for” designation. In some cases where a single company received the top score across multiple categories, the company with the next-highest score was named the winner.