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Mortgages

Mortgages can help you finance your first (or next) home purchase — here are 5 of the best mortgage lenders of June 2024

CNBC Select rounded up five of the best mortgage lenders to help you streamline your search.

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The home-buying process is notoriously stressful and oftentimes confusing, especially if you're taking on a mortgage to finance your purchase. There's a lot to learn when it comes to the home loan application process, so CNBC Select rounded up a list of five of the best mortgage lenders to help you streamline the process and find a lender that best suits your needs. We evaluated home loan lenders based on the types of loans offered, customer support and minimum down payment amount, among others (see our methodology below.)

It's important to keep a few things in mind when you're looking to apply for a mortgage. First off, mortgage interest rates can fluctuate quite often — the rate you receive will heavily depend on your location, credit score and credit report. While you can take a look at each lender's website to get an idea of what interest rates they charge, the best way to get a solid idea of what you will be charged is to provide the necessary information to check your rate.

Also, note that the mortgage approval and acceptance process comes with many fees, collectively called "lender fees." Some lenders may waive certain fees or provide discounts on fees. It's always a good idea to ask which fees have the potential to be waived but when you decide to move forward with a particular loan from a lender, prepare yourself to account for these additional charges.

The best mortgage lenders

Compare offers to find the best mortgage lenders

Best for lower credit scores

Rocket Mortgage

  • Annual Percentage Rate (APR)

    Apply online for personalized rates

  • Types of loans

    Conventional loans, FHA loans, VA loans and jumbo loans

  • Terms

    15- and 30-year conventional loans, 30-year VA and FHA loans, custom mortgages with fixed-rate terms from 8 to 29 years.

  • Credit needed

    Typically requires a 620 credit score but will consider applicants with a 580 as long as other eligibility criteria are met.

  • Minimum down payment

    3.5% if moving forward with an FHA loan

Already have a mortgage through Rocket Mortgage or looking to start one? Check out the Rocket Visa Signature Card to learn how you can earn rewards

Pros

  • Largest home lender in the U.S.
  • Offers 1% down conventional mortgage
  • High scores for customer satisfaction
  • Shorter-than-average closing time
  • Rebate of up to $10,000 for buying with Rocket Homes

Cons

  • No USDA mortgages, construction loans or HELOCs
  • Hard credit check required for customized rate
  • Higher origination fees than competition
  • No retail branches

Who's this for? Rocket Mortgage is one of the biggest U.S. mortgage lenders and has become a household name. Most mortgage lenders look for a minimum credit score of 620 but Rocket Mortgage accepts applicants with lower credit scores at 580 for some loan options.

The lender even has a program called the Fresh Start program that's aimed at helping potential applicants boost their credit scores before applying. Keep in mind, though, that if you apply for a mortgage with a lower credit score, you may be subject to interest rates on the higher end of the lender's APR range.

This lender offers conventional loans, FHA loans, VA loans and jumbo loans but not USDA loans, which means this lender may not be the most appealing for potential homebuyers who want to purchase with a 0% down payment for property in a rural area. Rocket Mortgage doesn't offer construction loans (if you want to build a brand new custom home) or HELOCs, but if you're a homebuyer who only plans to purchase a single-family home, a second home, or a condo that's already on the market, this shouldn't be a drawback for you.

This lender offers flexible loan repayment terms of up to 30 years.

Don't miss: Rocket Mortgage launches the new ONE+ program: Is the 1% down payment mortgage worth it?

Best for flexible down payment options

Chase Bank

  • Annual Percentage Rate (APR)

    Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included

  • Types of loans

    Conventional loans, FHA loans, VA loans, DreaMaker℠ loans and Jumbo loans

  • Terms

    10 – 30 years

  • Credit needed

    620

  • Minimum down payment

    3% if moving forward with a DreaMaker℠ loan

  • Terms apply.

  • Offers first-time homebuyer assistance?

    Yes — click here for details

Pros

  • Chase DreaMaker℠ loan allows for a slightly smaller down payment at 3%
  • Discounts for existing customers
  • Online support available
  • A number of resources available for first-time homebuyers including mortgage calculators, affordability calculator, education courses and Home Advisors

Cons

  • Doesn't offer USDA loans or HELOCs
  • Existing customers discounts apply to those who have large balances in their Chase deposit and investment accounts

Who's this for? Chase Bank provides several options for homebuyers who prefer to make a lower down payment on their home. The traditional advice has been to make a down payment that's about 20% of the price of the home, however, Chase offers a loan option called the DreaMaker loan that would allow homebuyers to make a down payment that's as low as 3% (by comparison, the FHA loan requires borrowers to make a 3.5% down payment).

This option is made for those who can only afford a smaller down payment, but it also comes with stricter income requirements compared to their other loans (the annual income used to qualify the customer must not exceed 80% of the Area Median Income (AMI), according to the Chase team). If you meet the income requirements for the DreaMaker loan, this option could be very attractive for those who would prefer to make a down payment that's as small as possible so they can have more money reserved for other homebuying expenses.

In addition to the DreaMaker loan, Chase also offers a conventional loan, FHA loan, VA loan and jumbo loan (USDA loans and HELOCs are not offered by this lender). Much like other lenders, Chase has a minimum credit score requirement of 620 for their mortgage options.

Chase offers mortgage terms that range from 10 years to 30 years, as well as fixed-rate and adjustable-rate mortgages (ARM). This lender also offers discounts for existing customers, but the requirements are rather high: For $500 off your mortgage processing fee, you need to have $150,000–$499,999 between Chase deposit accounts and Chase investment accounts; $500,000 or more in these accounts can get you up to $1,150 off the processing fee.

On top of this, Chase provides a number of resources to help their customers navigate the process and feel comfortable managing their mortgage, including online customer support, mortgage calculators and educational articles.

Best for no lender fees

Ally Home

  • Annual Percentage Rate (APR)

    Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included

  • Types of loans

    Conventional loans, HomeReady loan and Jumbo loans

  • Terms

    15 – 30 years

  • Credit needed

    620

  • Minimum down payment

    3% if moving forward with a HomeReady loan

Terms apply.

Pros

  • No lender fees
  • Preapproval in as little as three minutes
  • Available in all 50 states
  • HomeReady loan only requires a 3% down payment

Cons

  • No FHA, USDA or VA loans
  • No home equity line of credit (HELOC) loans
  • No physical branches

Who's this for? It's common for lenders to charge several fees on mortgage applications, including an application fee, origination fee, processing fee and underwriting fee — these fees can end up costing a significant amount during the home-buying process. Ally Bank doesn't charge any of these fees (they may, however, charge an appraisal fee and recording fee, and may charge title search and insurance). You can get pre-approved for a loan in as little as three minutes online.

Ally offers a HomeReady mortgage program geared toward low- to mid-income homebuyers (regardless of whether it's their first time or if they're a repeat buyer) that would allow them to put down as little as 3% for a down payment. Applicants must also have a debt-to-income ratio of no more than 50%, their income must be equal to or less than 80% of the area's median income and at least one borrower must take a homeowner education course.

In addition to this loan option, homebuyers can also apply for a jumbo loan (FHA loans, VA and USDA loans are not available through this lender). Customers can also choose between fixed-rate and adjustable-rate mortgages, and 15-year, 20-year and 30-year loan terms.

Best for flexible loan options

PNC Bank

  • Annual Percentage Rate (APR)

    Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included

  • Types of loans

    Conventional loans, FHA loans, VA loans, USDA loans, jumbo loans, HELOCs, Community Loan and Medical Professional Loan

  • Terms

    10 – 30 years

  • Credit needed

    620

  • Minimum down payment

    0% if moving forward with a USDA loan

Terms apply.

Pros

  • Offers a wide variety of loans to suit an array of customer needs
  • Available in all 50 states
  • Online and in-person service available

Cons

  • Doesn't offer home renovation loans

Who's this for? It's sometimes tough to find lenders that offer USDA loans in addition to other standard mortgage options, but PNC Bank includes USDA loans in their lineup. This lender also offers conventional loans, FHA loans, VA loans, jumbo loans and a PNC Bank Community Loan, which is a special program that allows homebuyers to put down as little as 3% (without paying private mortgage insurance) while still choosing between fixed-rate and adjustable-rate mortgage terms.

This lender also offers a special loan option catered to medical professionals who are looking to buy a primary residence only. With this loan, medical professionals can apply for as much as $1 million and won't have to pay private mortgage insurance (PMI), regardless of their down payment amount. They can also choose between fixed-rate and adjustable-rate terms.

PNC Bank offers online and in-person mortgage application processes, which can be a plus for homebuyers who don't live near a PNC Bank location but still want to apply for a loan. You can get online prequalifications in as little as 30 minutes as long as you have all the documentation on hand and similar to most other lenders, PNC Bank has a minimum credit score requirement of 620.

Best for saving money

SoFi

  • Annual Percentage Rate (APR)

    Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included

  • Types of loans

    VA loan, FHA loan, conventional loan, fixed-rate loan, adjustable-rate loan, jumbo loan, HELOCS & Closed End Second Mortgages

  • Terms

    10 – 30 years

  • Credit needed

    600

  • Minimum down payment

    3%

Terms apply.

Pros

  • Fast pre-qualification
  • Provides access to Mortgage Loan Officers for guidance
  • 0.25% price reduction when you lock in a 30-year rate for a conventional loan
  • Offers up to $9,500 cash back if you purchase a home through the SoFi Real Estate Center

Cons

  • Doesn't offer USDA loans
  • Mortgage loans are not available in Hawaii

Who's this for? SoFi offers homebuyers many discounts that can help them save as much money as possible throughout their home-buying process. When you lock in a 30-year rate for a conventional loan, you can receive a 0.25% discount. And when you purchase a home through the SoFi Real Estate Center, which is powered by HomeStory, you can receive up to $9,500 in cash back.

This lender offers an online-only experience for those looking to qualify for a conventional loan, jumbo loan, VA loan, FHA loan, fixed and adjustable-rate loan and closed end second mortgages. Terms range from 10 to 30 years and are both fixed and adjustable-rate. Similar to most other lenders, SoFi considers applicants with a minimum credit score of 600.

Homebuyers can also take advantage of a host of resources from SoFi, like a home affordability calculator, a mortgage calculator and a home improvement cost calculator, which can come in handy if you're purchasing a home that needs some work done and you need to figure out ahead of time how much to budget for renovations.

What is pre-approval and how does it work?

Pre-approval is a statement or letter from a lender that details how much money you can borrow to purchase a home and what your interest rate might be. To get pre-approved, you may have to provide bank statements, pay stubs, tax forms and employment verification, to name a few. Once you're pre-approved, you'll receive a mortgage pre-approval letter, which you can use to begin viewing homes and start making offers. It's best to get pre-approved at the start of your home-buying journey before you start looking at homes.

How do mortgages work?

A mortgage is a type of loan that you can use to purchase a home. It's also an agreement between you and the lender that essentially says that you can purchase a home without paying for it in full upfront — you'll just put some of the money down upfront (usually between 3% and 20% of the home price) and pay smaller, fixed equal monthly payments for a certain number of years plus interest.

For example, you probably can't pay $400,000 for a home upfront, however, maybe you can afford to pay $30,000 upfront; a mortgage would allow you to make that $30,000 payment while a lender gives you a loan for $370,000 (the remaining amount) and you agree to repay that amount plus interest to the lender over 15 or 30 years.

Keep in mind that if you choose to put down less than 20%, you'll be subject to private mortgage insurance (PMI) payments in addition to your monthly mortgage payments. However, you can usually have the PMI waived after you've made enough payments to build 20% equity in your home.

Where do you get a mortgage?

There are a variety of mortgage brokers out there offering an array of loan products for financing a home purchase. You can consider mortgages from credit unions, in-person banks and even an online lender. Because there are so many options, it can take some time to decide which financial institutions offer loans that are best fit for you.

There are also different kinds of mortgages you may qualify for, like conventional mortgages, which are not backed by any government programs. FHA loans, which are another type of mortgage, are one of the many government-backed loans borrowers can consider.

You can visit lender websites or jump on the phone with representatives to see if you're a qualifying borrower and to get an idea of what loan estimates might suit your needs. You may also discuss whether fixed-rate mortgages or adjustable-rate mortgages are best for you, though, some lenders may only offer one or the other. Be sure to also inquire about any loan programs you may qualify for to help save some money.

Mortgage companies may also offer other products aimed at assisting you with homeownership. Some lenders also offer home equity lines of credit, which is a revolving credit line that is secured by your home and can be used for big expenses or debt consolidation. Refinancing is another popular loan product some homeowners inquire about, which can lower the interest rate of your current mortgage.

How is my mortgage rate decided?

Mortgage rates change almost daily and can depend on market forces such as inflation and the overall economy. While the Federal Reserve doesn't set mortgage rates, mortgage rates tend to move in reaction to actions taken by the Federal Reserve on its interest rates.

Market forces may influence the general range of mortgage rates but your specific mortgage rate will depend on your location, credit report and credit score. The higher your credit score, the more likely you are to be qualified for a lower mortgage interest rate.

You can get quotes from multiple lenders to compare and even potentially negotiate your mortgage rate down.

FAQs

A conventional loan is a loan that's funded by private lenders and sold to government enterprises like Fannie Mae and Freddie Mac. It's the most common type of loan and some lenders may require a down payment as low as 3% or 5% for this loan.

A Federal Housing Administration loan (FHA loan) is a loan that typically allows you to purchase a home with looser requirements. For example, this type of loan may allow you to get approved with a lower credit score and applicants may be able to get away with a higher debt-to-income ratio. You typically only need a 3.5% down payment with an FHA loan.

A USDA loan is a loan offered through the United States Department of Agriculture and is aimed at individuals who want to purchase a home in a rural area. A USDA loan requires a minimum down payment of 0% — in other words, you can use this loan to buy a rural home without making a down payment.

A VA mortgage loan is provided through the U.S. Department of Veterans Affairs and is meant for service members, veterans and their spouses. They require a 0% down payment and no mortgage insurance.

A jumbo loan is a mortgage that exceeds the conforming loan limit for the area where the property is located, and in most areas, the 2023 loan limit is $726,200 for a single-family home. Jumbo loans do not meet the guidelines set by the Federal Housing Finance Agency (FHFA), which governs Fannie Mae and Freddie Mac, so they typically have stricter credit score and debt-to-income ratio requirements.

In addition to the down payment, you'll need to pay various fees when closing on a mortgage. Lender fees can run you an average of an additional $1,387, according to ValuePenguin. This can include an origination fee, processing fee, application fee and an underwriting fee. In addition to lender fees, you may also pay a document preparation fee, an appraisal fee, title search fee, title insurance and more.

A 15-year mortgage gives homeowners 15 years to pay off their mortgage in fixed, equal amounts plus interest. By contrast, a 30-year mortgage gives homeowners 30 years to pay off their mortgage. With a 30-year mortgage, your monthly payments will be lower since you'll have a longer period of time to pay off the loan. However, you'll wind up paying more in interest over the life of the loan since interest is charged monthly. A 15-year mortgage lets you save on interest but you will likely have a higher monthly payment.

Your mortgage rate depends primarily on your credit score, your debt-to-income ratio, the location of the property you're purchasing and loan size, among other factors. Benchmarks for the mortgage rate at any given time are also influenced by interest rates set by the Federal Reserve, though, the Fed doesn't actually set mortgage rates.

Certain types of home loans have lower approval requirements, which make them more accessible to borrowers with lower credit scores or other circumstances that would otherwise prevent them from being approved for a conventional loan. FHA loans, for instance, typically have a lower credit score requirement of 580 and allow for lower down payment amounts at 3.5%. VA loans and USDA loans have a minimum down payment requirement of 0%.

The best way to receive some of the lowest mortgage rates offered by a lender is to apply with a high credit score and lower your debt-to-income ratio. Borrowers with lower credit scores are typically seen as riskier borrowers compared to those with higher credit scores. Because of this, lenders are more likely to give you a lower mortgage rate if you improve your credit score before applying.

If you're a member at some local banks, you may be able to receive special relationship discounts on your home loan just for having an existing account that reaches any potential balance requirements. This can be advantageous since it allows you to save money on your mortgage. If you're considering a local bank where you're already an existing customer, be sure to ask about relationship discounts.

Why trust CNBC Select?

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every mortgage review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of mortgage products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best mortgages.

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Our methodology

To determine which mortgage lenders are the best, CNBC Select analyzed dozens of U.S. mortgages offered by both online and brick-and-mortar banks, including large credit unions, that come with fixed-rate APRs and flexible loan amounts and terms to suit an array of financing needs.

When narrowing down and ranking the best mortgages, we focused on the following features:

  • Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed rate APR, you lock in an interest rate for the duration of the loan's term, which means your monthly payment won't vary, making your budget easier to plan.
  • Types of loans offered: The most common kinds of mortgage loans include conventional loans, FHA loans and VA loans. In addition to these loans, lenders may also offer USDA loans and jumbo loans. Having more options available means the lender can cater to a wider range of applicant needs. We have also considered loans that would suit the needs of borrowers who plan to purchase their second home or a rental property. 
  • Closing timeline: The lenders on our list can offer closing timelines that vary from as promptly as two weeks after the home purchase agreement has been signed to as many as 45 days after the agreement has been signed. Specific closing timelines have been noted for each lender.
  • Fees: Common fees associated with mortgage applications include origination fees, application fees, underwriting fees, processing fees and administrative fees. We evaluate these fees in addition to other features when determining the overall offer from each lender. Though some lenders on this list do not charge these fees, we have noted any instances where a lender does charge such fees. 
  • Flexible minimum and maximum loan amounts/terms: Each mortgage lender provides a variety of financing options that you can customize based on your monthly budget and how long you need to pay back your loan.
  • No early payoff penalties: The mortgage lenders on our list do not charge borrowers for paying off the loan early. 
  • Streamlined application process: We considered whether lenders offered a convenient, fast online application process and/or an in-person procedure at local branches. 
  • Customer support: Every mortgage lender on our list provides customer service available via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
  • Minimum down payment: Although minimum down payment amounts depend on the type of loan a borrower applies for, we noted lenders that offer additional specialty loans that come with a lower minimum down payment amount. 

After reviewing the above features, we sorted our recommendations by best for overall financing needs, quick closing timeline, lower interest rates and flexible terms.

Note that the rates and fee structures advertised for mortgages are subject to fluctuate in accordance with the Fed rate. However, once you accept your mortgage agreement, a fixed-rate APR will guarantee interest rate and monthly payment will remain consistent throughout the entire term of the loan, unless you choose to refinance your mortgage at a later date for a potentially lower APR. Your APR, monthly payment and loan amount depend on your credit history, creditworthiness, debt-to-income ratio and the desired loan term. To take out a mortgage, lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.

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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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