Best mortgage lenders of October 2023

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Choosing a mortgage lender is one of the most important homebuying decisions you’ll make. Here are our picks.

Choosing a mortgage lender is one of the most important homebuying decisions you’ll make. Here are our picks.

David Gyung/Getty Images/iStockphoto

Whether you’re buying a home, refinancing, or tapping into your home equity, the loan you choose will determine your monthly payment and the overall cost of financing. The best mortgage lenders offer competitive rates, reasonable lender fees, and a variety of loan types and terms. 

Even small differences in loan rates can add up to thousands of dollars over the life of the loan, so comparing your options and making an informed decision are essential. Here are our top picks to help you get started—whether you’re shopping for a conventional mortgage, FHA loan rates, or the best VA loan rates.     

Best mortgage lenders of October 2023

Ally: Best for competitive markets

Ally has a quick application process that can be completed 100% online. Unlike most big banks and lenders, Ally has zero lender fees, and you won’t pay any application, origination, processing, or underwriting fees. You can get pre-approved in as few as three minutes, and loans typically close up to 10 days faster than the industry average, making Ally a great option in fast-moving markets. 

  • Fast pre-approval and closing
  • No lender fees
  • Fannie Mae’s HomeReady Mortgage program for first-time homebuyers
  • Pre-approval is required before applying for a loan
  • No FHA, VA, or USDA loans
  • No physical branch locations

Rocket Mortgage: Best customer service 

Rocket Mortgage makes it easy to get help when you need it. Customer service is available by phone from 7 a.m. to midnight ET on weekdays, 9 a.m. to 8 p.m. on Saturdays, and 9 a.m. to 7 p.m. on Sundays. If you prefer customer service via live chat, you can connect with a real person from 7 a.m. to midnight on weekdays and 8 a.m. to midnight on weekends. 

  • Numerous loan options, including FHA, VA, HomeReady, and Home Possible
  • As little as 1% down with no mortgage insurance if you qualify for the ONE+ loan
  • Buy with Rocket Homes and Rocket Mortgage and get a 1.25% closing credit (up to $10,000)
  • No physical branch locations
  • No USDA loans
  • No home equity lines of credit (HELOCs)

PNC Bank: Best mortgage education

PNC’s Home Insight service guides you through the entire homebuying process, from determining how much you can afford and getting pre-approved to applying for and tracking your loan application. Once you start an online application, you’ll be connected to a loan officer who will answer your questions and help you navigate the process. 

  • Online and in-person options to apply
  • Grants of up to $5,000 for qualified lower-income borrowers
  • Several options for low-down-payment loans, including FHA, USDA, VA, and PNC’s Community Loan
  • No home equity or renovation loans
  • The application process isn’t 100% digital

Veterans United Home Loans: Best for veterans 

Veterans United is the nation’s largest VA lender that’s “all about helping veterans and military families become homeowners.” It offers competitive rates on purchase and refinance mortgages to eligible veterans, active-duty service members, National Guard and Reserves members, and surviving spouses (civilian borrowers can apply for non-VA loans). A 1% lender fee (capped at $3,500) applies to all loans. 

  • 24/7 customer service by phone
  • Free credit counseling services
  • Licensed in all 50 states
  • No home equity loans or HELOCs
  • Physical branches in a limited number of states

Bethpage Federal Credit Union: Best for rate transparency 

Bethpage makes it easy to compare sample rates and APRs on its website for numerous fixed-rate, adjustable rate (ARM), FHA, jumbo, and home equity loans. There’s also a tool that lets you enter a loan amount to see your estimated monthly payment (including principal and interest) for the various loan types and terms. 

  • Broad range of purchase, refinance, and equity loans
  • Investment property loans
  • Anyone can join Bethpage, which is unusual for a credit union
  • No USDA loans
  • Customized rates aren’t available online
  • Loans aren’t available in Texas

Better.com: Best for no fees 

Better is a 100% digital lender that doesn’t charge any fees, and its mortgage rates are currently lower than the national average. It’s also fast: You can get pre-approved for a loan in about 20 minutes — or lock in a rate and get a loan commitment letter within 24 hours. 

  • No commissions or lender fees (closing costs still apply)
  • Loan pre-approval in as few as 20 minutes
  • 24/7 live support by phone and email
  • No VA, USDA, or home equity loans
  • The company’s share price has struggled since going public in August 2023 

Guaranteed Rate: Best loan selection

Guaranteed Rate offers an impressive lineup of loan products, including fixed-rate, ARM, FHA, VA (with zero lender fees), jumbo, HELOC, home renovation, and home equity conversion mortgage (HECM) loans, plus personal loans. A user-friendly website makes comparing options simple, and you can get personalized rates by answering a few questions. There’s also a terrific selection of mortgage calculators to help you evaluate your financing options. 

  • Broad range of loan products
  • Qualified borrowers can get approved in one day
  • User-friendly website makes research easy
  • HELOC has a shorter draw period compared to some lenders
  • You might find lower origination fees elsewhere

Bank of America: Best for low- to middle-income borrowers 

The Bank of America Community Homeownership Commitment offers solutions for modest-income and first-time homebuyers, including affordable mortgages and grant programs. Two grant programs provide eligible borrowers up to $10,000 for down payment costs and up to $7,500 for closing costs. The Affordable Loan Solution mortgage offers a 3% down payment, a competitive rate, and reduced-cost mortgage insurance. Preferred Rewards customers can save $200 on loan origination fees and get a 0.125% interest rate discount on a new HELOC

  • Qualified borrowers can get a low-down-payment loan with reduced-cost mortgage insurance
  • Grants to help with down payment and closing costs
  • You can apply in-person or online
  • No USDA loans
  • Pre-approval process is slower than some banks

NBKC Bank: Best for low fees 

NBKC Bank charges a flat $250 fee (including the loan application, underwriting, processing, and origination) for loans of any size, a terrific rate compared to what you’ll find at many lenders. It waives the fee for VA loans. Most of its loan products are available in all 50 states, except for HELOCs, which it offers only in the Kansas City metro area. 

  • Easy, 100% online applications
  • Specialty mortgages for pilots
  • Customized rates and fee estimates without entering contact info
  • No weekend customer service hours
  • HELOCs available for Kansas City metro area residences only
  • No home improvement or renovation loans

Mortgage FAQs

What is a mortgage?

A mortgage is a secured loan used to buy a home. You repay the loan with interest over a set period, such as 15 or 30 years. As you pay down the principal, you build equity, and when you eventually pay off the loan, you’ll own the home free and clear. Because the property serves as collateral, the lender has the right to take the home (via foreclosure) if you default on your payments.

How does a mortgage work?

When you get a mortgage, your lender gives you a specific amount of money to buy a home. Depending on the loan type, you may be required to make a down payment of 1% to 20% of the home’s price. 

Each month, you repay part of the principal (the original loan amount) plus interest—and your lender might also roll property taxes, homeowners insurance, and mortgage insurance into the monthly payment. 

If you have a fixed-rate loan, your monthly payment stays the same throughout the loan. With adjustable-rate mortgages (ARMs), your monthly payment could increase or decrease as interest rates change. 

What is mortgage insurance?

Lenders generally require you to pay for mortgage insurance if your down payment is less than 20% of the home’s purchase price. The insurance doesn’t protect you; it protects the lender in case you default on the loan. 

If you have a conventional loan, you’ll pay private mortgage insurance (PMI) premiums until you have at least 20% equity in your home. Loans backed by the Federal Housing Administration (FHA) require you to pay mortgage insurance premiums (MIP) for as long as you have the loan, with one exception: If your down payment is more than 10%, you’ll pay MIP for 11 years. 

How much mortgage can I afford?

A good starting point is the 28/36 rule: Spend no more than 28% of your gross (pre-tax) monthly income on home-related costs and no more than 36% on your total debts, including your mortgage, car loan, student loan, and credit card bill. 

Of course, what’s affordable for you depends on numerous factors, including your income, savings and investments, and debts and expenses. While buying as much house as you can afford is tempting, spending less can leave some wiggle room in your budget. 

Will mortgage rates go down in 2024?

Mortgage rates remain elevated, with the average 30-year fixed-rate mortgage hovering around 7%, according to data from the Federal Reserve. However, based on slowing inflation, the National Association of Realtors (NAR) forecasts that the 30-year fixed-rate mortgage could reach 6.4% by the end of 2023, followed by 6% in 2024. 

Editorial Disclosure: All articles are prepared by editorial staff and contributors. Opinions expressed therein are solely those of the editorial team and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in this article is accurate as of the date of the publish. Check the lender’s website for the most current information.

This article was originally published on SFGate.com and reviewed by Lauren Williamson, who serves as Financial and Home Services Editor for the Hearst E-Commerce team. Email her at [email protected].

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