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580
Lower than the national average
14 days
|
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Expert Reviewed
|Mortgages And Home Equity ExpertUpdated: Oct 7, 2024, 6:45pm
There are more online mortgage lenders than ever before. We compiled a list of the best online mortgage lenders that excel in various areas to help you find a lender that fits your needs.
Why you can trust Forbes Advisor
Our editors are committed to bringing you unbiased ratings and information. Our editorial content is not influenced by advertisers. We use data-driven methodologies to evaluate financial products and companies, so all are measured equally. You can read more about our editorial guidelines and the mortgages methodology for the ratings below.
580
Lower than the national average
14 days
Minimum credit score
580
Mortgage rates
Higher than the national average
Minimum down payment
0% to 3.5%
580
Higher than the national average
0% to 3.5%
Rocket Mortgage excels at offering mortgage products to fit the needs of almost every borrower. In addition to conventional fixed- and adjustable-rate mortgages, it provides jumbo, FHA and VA loan options. It also provides specialized loan programs such as ONE+ By Rocket Mortgage, which lets you put as little as 1% down on a home purchase.
Why We Like It
Rocket Mortgage makes applying for a mortgage easy because its streamlined Q&A application sequence evaluates your eligibility for loan programs. It also offers extended customer service hours if you need assistance navigating the application process.
What We Don’t Like
Although Rocket Mortgage has an impressive variety of loan options, it doesn’t offer USDA mortgages or provide loans to purchase land.
Who It’s Best For
Rocket Mortgage is best for home buyers who want to explore a variety of loan products to find the best rates and terms for their financial situation.
How to apply
Borrowers can apply online or through the Rocket Mortgage app. The lender can preapprove loans within eight minutes.
Phone support is available for in-process and closed loans by calling (800) 603-1955; available hours are Monday through Friday from 8:30 a.m. to 9 p.m. ET and Saturday from 9 a.m. to 4 p.m. ET. For new loans, call (888) 452-8179; available hours are Monday through Friday from 7 a.m. to midnight ET, Saturday from 9 a.m. to 8 p.m. ET and Sunday from 9 a.m. to 7 p.m. PT.
Chat support is available seven days a week. You reach chat support Monday through Friday from 7 a.m. to midnight ET and Saturday and Sunday from 8 a.m. to midnight ET.
Speed
As of February 2024, the average time to close a conventional refinance with Rocket Mortgage is 21 days, and the average time to close a conventional purchase loan is 36 days.
Eligibility
Loan types
Rocket Mortgage’s product line includes fixed and adjustable-rate mortgages, conventional, jumbo, FHA and VA loans. It also offers its own conventional loan, YOURgage, a custom-term, fixed-rate mortgage. Finally, its FHA streamline refinance loan allows existing FHA borrowers to refinance at a lower rate with less paperwork and no appraisal required. The lender offers home equity loans, but it doesn’t offer USDA loans or HELOCs.
Loan Type | Yes | No |
---|---|---|
Conventional
|
✓
|
|
FHA
|
✓
|
|
VA
|
✓
|
|
USDA
|
✓
|
|
Jumbo
|
✓
|
|
ARM
|
✓
|
|
Home equity loan
|
✓
|
|
Specialty
|
✓- YOURgage Flexible-Term Mortgage
|
Minimum credit score
620
Mortgage rates
Similar to the national average
Minimum down payment
0% to 3.5%
620
Similar to the national average
0% to 3.5%
PNC Bank maintains an extensive branch network that includes approximately 2,200 locations in over 28 states and Washington, D.C. That makes it ideal for borrowers who want to meet with a loan officer in person. At the same time, PNC offers an online application or the option to work with a specialist over the phone.
Why We Like It
PNC blends online and in-person banking, allowing borrowers to apply for a mortgage in whatever way works best for them. The bank also maintains low credit score requirements and quick turnarounds for loan preapproval.
What We Don’t Like
PNC Bank doesn’t have branches in all 50 states.
Who It’s Best For
PNC is best for borrowers who want to meet with a banker face-to-face to discuss their mortgage options, assuming they are in one of the states with branch access.
How to apply
Borrowers can apply online or in person at a bank location in the following states and Washington D.C.: Alabama, Delaware, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wisconsin.
Customer support by phone is available Monday through Thursday from 8 a.m. to 9 p.m. ET, Friday from 8 a.m. to 5 p.m. ET and Saturday from 9 a.m. to 2 p.m. ET. Preapproval can take as little as 30 minutes or up to one day.
Speed
The average closing time is 45 days, which is about the industry average. In some cases, the closing can be as short as 30 days.
Eligibility
Loan types
PNC Bank offers a wide selection of home loans, including conventional, FHA, VA, USDA and jumbo loans, home equity loans and specialty loans for medical professionals.
Loan Type | Yes | No |
---|---|---|
Conventional
|
✓
|
|
FHA
|
✓
|
|
VA
|
✓
|
|
USDA
|
✓
|
|
Jumbo
|
✓
|
|
ARM
|
✓
|
|
Home equity loan
|
✓
|
|
Specialty
|
✓ – Community (No PMI) Loan, Medical Professional Loan
|
Minimum credit score
500
Mortgage rates
Lower than the national average
Minimum down payment
0% to 10%
500
Lower than the national average
0% to 10%
New American Funding is a national mortgage lender that offers more than a dozen different loan types. These include mortgage products with low down payments and flexible terms. The company can issue mortgages to applicants with credit scores as low as 580 and offers non-qualified mortgages (non-QM) for those who are self-employed or have unique streams of income.
Why We Like It
In addition to working with self-employed borrowers and those with lower credit scores, New American Funding has demonstrated a commitment to helping improve access to homeownership for Latino and Black borrowers.
What We Don’t Like
Unlike some of the lenders listed here, New American Funding doesn’t offer a 100% online application process. It also advertises low lender fees but doesn’t disclose what those fees are.
Who It’s Best For
New American Funding is best for borrowers with lower credit scores or incomes that don’t meet standard underwriting requirements.
How to apply
Borrowers can apply online and preapproval can take one day.
Speed
Closing on a mortgage can take up to 30 days.
Eligibility
Loan types
New American offers 15- and 30-year, fixed-rate mortgages, including conventional loans, FHA loans and VA loans. Additionally, it offers a proprietary “I Can” mortgage, rate-buydown loans, ARMs and reverse mortgages.
Loan Type | Yes | No |
---|---|---|
Conventional
|
✓
|
|
FHA
|
✓
|
|
VA
|
✓
|
|
USDA
|
✓
|
|
Jumbo
|
✓
|
|
ARM
|
✓
|
|
Home equity loan
|
✓
|
|
Specialty
|
✓- I CAN loans
|
Minimum credit score
620
Mortgage rates
Lower than the national average
Minimum down payment
0% to 3.5%
620
Lower than the national average
0% to 3.5%
Guaranteed Rate offers mortgages with terms ideal for first-time home buyers. Its credit requirements are reasonable, and some mortgages require as little as 1% down. Both features can benefit young or new home buyers who have limited cash reserves and credit history.
Why We Like It
Guaranteed Rate has competitive interest rates and operates in all 50 states. Plus, there are no lender fees for its VA loans.
What We Don’t Like
Guaranteed Rate offers a same-day mortgage approval option with closing in as little as 10 days. However, it’s not available in certain states, and self-employed workers may not be eligible.
Who It’s Best For
Guaranteed Rate is best for first-time home buyers due to low minimum credit score and down payment requirements. If you have limited credit, the lender may even consider alternative data, such as your rent and utility payments, to qualify you for a loan.
How to apply
Borrowers can apply online or in person at one of Guaranteed Rate’s locations. Customer support is available by phone Monday through Friday, 8:30 a.m. to 5:30 p.m. CT. Expect a one- to two-day turnaround on preapproval letters.
Speed
Closing takes as few as 10 days with Guaranteed Rate’s Same Day Mortgage.
Eligibility
Loan types
Guaranteed Rate offers fixed- and adjustable-rate mortgages, including conventional and jumbo mortgages, FHA and VA loans and interest-only mortgages. Guaranteed Rate also offers home equity lines of credit (HELOCs).
Loan Type | Yes | No |
---|---|---|
HELOC
|
✓
|
|
Conventional
|
✓
|
|
FHA
|
✓
|
|
VA
|
✓
|
|
USDA
|
✓
|
|
Jumbo
|
✓
|
|
ARM
|
✓
|
|
Specialty
|
✓- Interest-only mortgages
|
Minimum credit score
580
Mortgage rates
Similar to the national average
Minimum down payment
0% to 3.5%
580
Similar to the national average
0% to 3.5%
Mr. Cooper is an online lender that offers a variety of mortgage and home equity loan products. As one of the nation’s largest nonbank home loan servicers, getting a loan with Mr. Cooper also means communicating with the same company from your loan application to closing and throughout the duration of loan repayment.
Why We Like It
In addition to sometimes offering interest rate markdowns on certain loans, Mr. Cooper has relatively flexible minimum credit score requirements. Its minimum requirement for an FHA loan is just 580, and a company spokesperson says there’s no set minimum for conventional loans. Even so, conventional loans are subject to underwriting approval.
What We Don’t Like
Although several government-backed programs are available, Mr. Copper offers no USDA loans.
Who It’s Best For
Mr. Cooper is best for anyone seeking to establish a long-term relationship with one mortgage company because it offers loan products and servicing.
Overview
Mr. Cooper is among the largest nonbank mortgage lenders in the country. It operates in all 50 states and offers conventional, jumbo, FHA and VA loans. Mr. Cooper is an online lender with no brick-and-mortar locations.
How To Apply
The entire application process takes place online. Customer support by phone is available Monday through Thursday from 7 a.m. to 8 p.m. CT, Friday from 7 a.m. to 7 p.m. CT and Saturday from 8 a.m. to 12 p.m. CT. Preapproval takes less than five hours.
Speed
Closing takes between 30 and 45 days.
Eligibility
Loan Types
Mr. Cooper offers both mortgages for buyers and refinancers. The lender offers fixed and adjustable-rate conventional and jumbo mortgages, FHA loans and VA loans. It doesn’t offer USDA loans or HELOCs.
Minimum credit score
620
Mortgage rates
Higher than the national average
Minimum down payment
3% to 10%
620
Higher than the national average
3% to 10%
Ally has a lightning-fast application and preapproval process. It says its Q&A-style application can be completed in 15 minutes, and you could receive a preapproval letter in mere minutes. Ally also says it can close loans 10 days faster than the industry standard.
Why We Like It
Borrowers can lock their mortgage rate and get a commitment letter from Ally within 24 hours of locking in their rate. The bank also currently offers an Ally Home Grant, which provides $5,000 toward down payment or closing costs for a qualified loan if you meet income and location requirements.
What We Don’t Like
Ally has limited loan options. For instance, it offers no FHA, VA or USDA loans.
Who It’s Best For
Ally is best for anyone shopping in a hot housing market or facing the prospect of a bidding war due to its quick preapprovals and speedy commitment letters.
How to apply
The application process is 100% online. Because Ally has no brick-and-mortar locations, customers will have to rely on phone correspondence for customer support. The only customer support option is by phone Monday through Friday, 9 a.m. to 9 p.m. ET and Saturday 10 a.m. to 6 p.m. ET. Preapproval takes as little as three minutes.
Speed
The lender’s average closing time is 36 days.
Eligibility
Loan types
Ally offers fixed- and adjustable-rate conventional and jumbo mortgages and HomeReady Loans. It doesn’t offer government-backed loans such as FHA, VA or USDA loans.
Loan Type | Yes | No |
---|---|---|
Conventional
|
✓
|
|
FHA
|
✓
|
|
VA
|
✓
|
|
USDA
|
✓
|
|
Jumbo
|
✓
|
|
ARM
|
✓
|
|
Home equity loan
|
✓
|
|
Specialty
|
✓ – HomeReady Loans
|
Compare rates from participating lenders in your area via Bankrate.com
Compare rates from participating lenders in your area via Bankrate.com
COMPANY | FORBES ADVISOR RATING | MINIMUM CREDIT SCORE | MORTGAGE RATES | MINIMUM DOWN PAYMENT | LEARN MORE |
---|---|---|---|---|---|
5.0 | 580 | Higher than the national average | 0% to 3.5% | Compare rates from participating lenders in your area via Bankrate.com | |
4.8 | 620 | Similar to the national average | 0% to 3.5% | Compare rates from participating lenders in your area via Bankrate.com | |
4.8 | 500 | Lower than the national average | 0% to 10% | On New American Funding’s Website | |
4.6 | 620 | Lower than the national average | 0% to 3.5% | Compare rates from participating lenders in your area via Bankrate.com | |
4.3 | 580 | Similar to the national average | 0% to 3.5% | Compare rates from participating lenders in your area via Bankrate.com | |
4.1 | 620 | Higher than the national average | 3% to 10% | Compare rates from participating lenders in your area via Bankrate.com |
You should choose an online mortgage lender by shopping around and negotiating terms. Studies have shown that borrowers who explore different options before working with a particular lender get better rates.
First, explore options starting with our recommendations. Then, make a shortlist of lenders to shop with by examining features you deem essential. For many borrowers, the most important features of a lender to consider are:
Prior to finding a home, complete mortgage applications with multiple lenders to get loan estimates. The loan estimate is a standardized document that shows the estimated rate, monthly payment and closing costs a lender is willing to offer pending a full review of your finances.
Obtaining loan estimates from several lenders is the best way to do a side-by-side analysis of upfront and long-term borrowing costs. Plus, having multiple loan estimates in hand can give you leverage in contract negotiations since competing lenders may offer rate reductions, discounts or other deals to win your business.
An online mortgage is a home loan you can apply for and manage primarily online. Because of this, online mortgages often have faster approval times and application processes than traditional loans.
Many online lenders don’t have brick-and-mortar branches, meaning they can often pass some of that overhead savings on to customers in the form of lower rates and fewer lender fees.
Customers who apply for a mortgage online with a direct lender will be able to apply for many of the same loan types traditional financial institutions offer, such as:
Today’s average online mortgage rate on a 30-year fixed mortgage is 7.12% compared to the 7.24% average rate a week earlier, according to Curinos.
For prospective homebuyers seeking lower interest rates and/or are less sensitive to monthly payments, obtaining a mortgage with a 15-year term can significantly reduce both the interest rate and the interest costs over the life of the loan.
Some online lenders may advertise their current rates on their websites. However, these rates contain assumptions about a borrower’s credit score, loan amount, debt-to-income (DTI) ratio and location that are unlikely to apply to your situation.
To give you a general idea of what to expect, Forbes Advisor lets you compare current mortgage rates, but keep in mind that these are national averages. Applying with several lenders and comparing your loan estimates from each one is the best way to find out what current online mortgage rates you can actually get.
An online mortgage lender may have better rates and lower fees than its brick-and-mortar competitors. This is because online lenders tend to have lower fixed costs (such as no physical locations to maintain) or better technology.
The best way to know if you could get a better rate with an online mortgage lender is to apply for the same loan on the same day with both types of lenders. You’d need to compare quotes from several online lenders against several brick-and-mortar lenders to get the best idea.
Ask an expert
Kim Nichols
Chief TPO Production Officer, Pennymac
Robin Rothstein
Mortgages and Loans Writer
In some cases, online lenders have lower overhead costs versus brick-and-mortar lenders, which can translate into lower rates. However, some online lenders incur higher marketing expenses, which can also increase the cost and translate into higher rates. It’s important to compare loan estimates from multiple lenders and/or brokers to ensure you are getting the best deal possible, regardless of whether or not the lender or broker operates online or has a physical presence in your area.
Chief TPO Production Officer, Pennymac
Borrowers with strong credit scores, stable finances and a reliable salary may find competitive rates from online lenders. However, those with a shaky credit history or irregular income may discover that online rates are less attractive than expected. Whatever your circumstances, make the most informed decision by comparing rates, fees and customer service across online and brick-and-mortar lenders. Also, when considering the mortgage process, decide whether your priority is a streamlined digital experience or cultivating an in-person lender relationship.
Mortgages and Loans Writer
Though there will likely be some variation depending on which direct lenders you choose, you can generally expect the online mortgage process to work similarly to applying for a mortgage at a traditional bank.
Once you are ready to apply online for a mortgage, expect to follow these general steps:
There are advantages—and disadvantages—to working with online mortgage lenders, which are also sometimes known as “non-bank” lenders.
Filling out a preapproval application with an online mortgage lender can be a fast and easy task. Some online lenders claim that you can even get preapproved in a matter of minutes. Lenders are otherwise required to provide a preapproval letter within three business days. You can apply for preapproval from several lenders at the same time.
For online mortgage lenders—or any reputable lender—to get a sense of the loan size you can manage, you will need to provide identifying information, such as your Social Security number, driver’s license and details on your financial health.
To be considered for preapproval, you must fill out a mortgage application for lenders to run a hard credit check. You must also provide most or all of these types of supporting documents:
Once you fill out the application and upload all the necessary information online, the lender will provide an estimated loan amount for which you qualify.
It is worth noting that preapproval letters are only valid for a specific period, typically 30 to 60 days, depending on the lender, so it’s best to apply for preapproval when you are ready to start shopping for homes. However, if your preapproval window expires, you can resubmit updated documents to be considered for a new preapproval letter.
Forbes Advisor graded the best online mortgage lenders based on features that have a meaningful impact on the cost of a mortgage and a borrower’s experience, including interest rates, loan options, accessibility, closing time and customer service.
We award bonus points if a lender offers a specialty mortgage product, rate discount or considers alternative credit data when determining loan eligibility.
Our scoring method is broken down as follows:
We chose to focus on these core elements to bring forward lenders that offer the most competitive rates while also providing a satisfactory customer experience accessible to borrowers of all financial backgrounds. We believe this scoring system best reflects consumers’ top priorities when comparison shopping for mortgage lenders.
To learn more about our rating and review methodology and editorial process, check out our guide on How Forbes Advisor Reviews Mortgage Lenders.
Mortgages expert Deborah Kearns contributed to this article.
A nonbank lender or an online lender are both terms used to describe financial institutions that offer limited services, such as personal loans or mortgages, and typically do not offer deposit services, such as checking or savings accounts. A traditional bank, in contrast, offers a spectrum of financial products for their customers. Traditional banks also have branch locations where customers can apply for loans in person. Sometimes traditional banks will have mortgage discounts for existing customers.
Because online or nonbank lenders focus on loans, they usually develop high-tech solutions to speed up approval times and streamline application processes, which can save borrowers time and money. Additionally, because they don’t have the overhead expenses of branch locations, they can pass those savings on to customers in the form of lower interest rates.
Nonbank lenders are the largest originators of mortgages today.
It’s harder to get any kind of mortgage with bad credit, but some lenders might be more accessible than others. For example, Guild Mortgage and Mr. Cooper are two lenders that accept applications with credit scores lower than 620, which is the score typically required for a conventional mortgage.
Lenders may work with the Federal Housing Administration (FHA) to approve mortgages for home buyers with poor credit. You can typically get an FHA loan with credit scores as low as 500; scores of at least 580 lend more favorable terms. However, FHA loans require mortgage insurance premiums, which drive up the overall cost of the loan but enable lenders to offer these more flexible terms.
If you’re applying for a home loan with a well-known, licensed online lender that has been in business for at least a couple of years and has a good reputation, the company is probably trustworthy.
You can always check the company’s history of consumer complaints and regulatory sanctions with the Better Business Bureau and the Consumer Financial Protection Bureau if you’re hesitant.
That said, if you’re simply more comfortable doing business in person, our list of the best mortgage lenders includes several brick-and-mortar options.
Rocket Mortgage is the No. 1 online mortgage lender in America, both by dollar amount and by number of loans originated. In 2022, Rocket originated 464,363 home loans totaling more than $127.5 billion, according to the most recent Home Mortgage Disclosure Act data.
An online mortgage lender is not inherently better or worse than a bank mortgage lender. Bank lenders can be a good fit for borrowers who want to walk into a local branch and talk to someone about home loans. Many banks also offer mortgages online. Online-only lenders sometimes have more advanced technology and lower operating expenses, which may allow them to originate loans faster or at a lower cost to borrowers.
With over three years of experience writing in the housing market space, Robin Rothstein demystifies mortgage and loan concepts, helping first-time homebuyers and homeowners make informed decisions as they navigate the home loan marketplace. Her work has been published or syndicated on Forbes Advisor, SoFi, MSN and Nasdaq, among other media outlets.
Jordan Tarver has spent seven years covering mortgage, personal loan and business loan content for leading financial publications such as Forbes Advisor. He blends knowledge from his bachelor's degree in business finance, his experience as a top performer in the mortgage industry and his entrepreneurial success to simplify complex financial topics. Jordan aims to make mortgages and loans understandable.
Jack Macdowell is the co-founder, managing member and chief investment officer of Palisades Group. He is responsible for leading all investment activities, including research, allocation and risk management. Prior to founding Palisades, from July 2009 until August 2012, Jack served as the chief investment officer of Carrington Capital Management, where he oversaw the teams responsible for investment strategies, quantitative analysis, mortgage credit analytics, trading, and risk management. Earlier, Jack served as a senior portfolio manager at Old Hill Partners, where he was responsible for the firm’s investments in mortgage-backed and asset-backed securities. He also was principal and head of capital markets, structuring and analytics at Carrington Capital Management, responsible for the firm’s mortgage credit analytics, its securitization activities related to more than $23 billion in acquired residential mortgage loans, and related portfolio interest rate risk management. At RBC Capital Markets, Jack served as vice president and associate in the asset securitization group. And, he worked in the asset securitization group at Credit Suisse First Boston focused on nonagency mortgage and manufactured housing-related securitizations along with tertiary involvement in credit card and auto loan-backed transactions. Jack is a CFA (chartered financial analyst) charterholder, a member of the CFA Institute, Board Member of the CFA Society Austin, a member of the executive counsel for UT Austin McCombs Real Estate, and a former member of the board of trustees for Vertical Capital Income Fund (VCIF).