Best Mortgage Lenders

If you are looking to purchase a home, the good news is you do not need to pay for your home out of pocket.

Read here to learn about how mortgage lenders can help you settle down in a new home today. When you buy a home, you generally buy it with a financial loan called a mortgage. A mortgage allows you to buy a home with only a fractional down payment and put down roots sooner than you would if you were to pay out of pocket. Generally, banks or credit unions serve as the mortgage lender, meaning they supply you with the money for the loan, and they are who you will be paying back as you pay off your mortgage. 

It is important to use discretion when deciding on a mortgage lender and consider factors that will impact how expensive or affordable the loan will be for you in the long-term. 

Why You Need a Mortgage Lender 

In the modern world, buying a home can be difficult and quite expensive. For most people, buying a home outright and out of pocket is unaffordable and doing that would leave them with a lowered quality of life or the inability to furnish their home. This is where mortgage lenders come in. 

Mortgage lenders allow people to purchase a home at a younger age. This gives them the benefit of starting a family or running a business, all while paying off the home over time to the mortgage lender. Without a mortgage lender many, if not most, people would not be able to afford a home. 

Mortgage lenders allow you to grow your financial profile beyond what might have been possible without a mortgage lender and to invest in generational wealth to be passed down to descendants. It may seem like an overwhelming commitment to make, but the benefits are that you pay off your mortgage in your lifetime and then your home belongs to you and your family for many generations, or until it is sold.  

How to Pick a Mortgage Lender 

When comparing mortgage lenders to finance your home purchase there is a lot to consider. Taking on a mortgage is a long-term financial commitment. These are some key factors to consider when choosing a mortgage lender. 

  • Mortgage Rate - When deciding on a mortgage lender, the first and most obvious factor to consider is how much they will lend you. Financial institutions usually offer a maximum amount ceiling for your mortgage loan depending on your current income, credit score, financial history, and down payment amount. This is an important factor to consider because you have to make sure the loan will cover the cost of purchasing your home of choice, but will not be too extravagant to pay off. 

  • Mortgage Terms - Mortgage terms are the next important factor to consider when choosing a lender. Terms will include your eligibility for the loan including minimum credit score and the down payment amount you usually must make out of pocket. 

  • Interest Rate - The third most important thing you need to consider is the APR on your mortgage and if you can afford it, or if it will break your budget. It is always wise to look for the smallest APR possible, which means you will be charged the smallest amount in interest over time. Negotiate the interest rate with your lender and find out whether the rate will be fixed or fluctuating over time (commonly referred to as an ARM…adjustable rate mortgage). This will determine how much you end up paying for your home in the long run. 

  • Term Length - The fourth most important factor to consider when deciding on a lender is the length of time you will be granted to pay off your mortgage. It is crucial to make sure that the time-to-close granted is enough time for you to pay off the mortgage loan without sacrificing your quality of life, but not such a long time that you end up wasting money on interest fees. 

Best Mortgage Lenders 

When choosing a mortgage lender, it is important to compare mortgage specs to make sure that you are making the best choice for your future. There are some factors that make some mortgage lenders stand out from the rest, such as a low average interest rate. If you do not have the best credit score, finding a lender who still allows you to qualify for a mortgage without giving you a steep interest rate is important for your financial future. Here is a comprehensive list of the best mortgage lenders and details of their mortgage options for you to consider. 

  • Mr. Cooper - Mr. Cooper is a non-bank mortgage lender, who offers a lower minimum credit score eligibility than most other lenders. Their minimum credit score eligibility is as low as 580. They offer a phone app that can help you keep track of your financial profile, loan payments, and home equity easily. This is a perk of their customer service. They also offer some discount programs allowing lower income families to achieve mortgage loans sooner. 

  • Bank of America - Bank of America is a banking giant that offers mortgages with a variety of mortgage rates, from lower income families to higher income families. They have a program called the Affordable Loan Solution, which includes mortgages with a down payment percentage of only 3%. The minimum credit score requirement for Bank of America mortgage loans is the national average of 620. Their interest rates vary, as they offer fixed or adjustable APR over time. They also offer a feature where alternative credit data can be considered for your credit assessment, including rent and utility payments. 

  • Better - Better offers fast loans, with an application approval time of only 20 minutes or less. They are a completely digital mortgage lender, which offers convenience in the application process. They offer automatic discounts, which their online platform is programmed to automatically search for as you apply. They do not charge fees such as origination fee, application fees, or underwriting fees. This can save you on average about $20,000 on your mortgage compared to other lenders. Their minimum credit score requirement is 620, but they offer alternative forms of credit assessment such as rent and utility payments.