Best online mortgage lenders of January 2024
khunkornStudio / Shutterstock
Updated: January 02, 2024
We adhere to strict standards of editorial integrity to help you make decisions with confidence. Please be aware that some (or all) products and services linked in this article are from our sponsors.
We adhere to strict standards of editorial integrity to help you make decisions with confidence. Please be aware that some (or all) products and services linked in this article are from our sponsors.
Are you ready for a new home but dread the mortgage application process? Yesteryear’s paper-heavy loan processes now have stiff competition from a growing class of online mortgage lenders promising simpler application rules and faster approval times.
But it’s a crowded marketplace. And while that competition is good for consumers, picking a lender can be confusing. That’s why we’ve assembled some of the best online mortgage lenders in one spot.
Best online mortgage lenders
| Lender | Minimum credit score | Loan types | What we like | Find out more |
|---|---|---|---|---|
|
Better
|
620 for conventional loans and FHA loans | Fixed-rate, ARM rates for conventional and jumbo loans, FHA. | Best for beginners, website and process are intuitive | Better |
| Loan Depot | 620 for conventional mortgages, 500 for FHA loans | Fixed-rate, ARM, VA, FHA | Network of loan officers provides human touch if needed | Loan Depot |
| Ally | 620 for conventional loans; 700 for jumbo loans | Fixed-rate, ARM, jumbo | Fast approvals, simple for users to rate-shop | Ally review |
| New American Funding | 620 for conventional loans | Fixed-rate, ARM, jumbo, FHA, VA, reverse, others | Numerous loan types, high-profile commitment to minority lending | New American Funding |
| Homefinity | 620 for conventional loans; 600 for FHA loans and VA loans | Fixed-rate, ARM, FHA, VA | Wide variety of options, quick approvals | Homefinity |
| SoFi | 620 for conventional loans | Fixed-rate, ARM, jumbo, FHA, VA, others | Speedy pre-qualification, plentiful loan options |
SoFi
|
| Rocket Mortgage | 580 for VA loans | Fixed-rate, ARM, jumbo, FHA, VA |
Loan variety covers most known options
|
Rocket Mortgage |
| Mr. Cooper | 620 for conventional loans; 580 for FHA loans; 600 for VA loans | Fixed-rate, ARM, jumbo, FHA, VA | Among the most friendly lenders to those with poor credit | Mr. Cooper |
Best for beginners: Better
Quick Facts
Minimum credit score: 620 for conventional loans and FHA loans
Loan types: Fixed-rate, ARM rates for conventional and jumbo loans, FHA
Learn more: Better
Why we chose Better as a best online mortgage lender
Better offers numerous benefits designed to simplify and enhance the home-buying experience. One of its standout features is the one-day mortgage option. Eligible borrowers can apply, lock in a rate, and receive a loan commitment – all within an impressive 24-hour timeframe, significantly speeding up the traditionally lengthy mortgage process.
Additionally, Better doesn't lag behind when it comes to cost-effectiveness; recent federal data indicates its average interest rates are on the lower end compared to other lenders, making it an economically sound choice.
Better also offers a versatile Home Equity Line of Credit (HELOC) option that isn't just limited to your primary residence; it can also be applied to a second home or even an investment property. These advantages make Better online mortgage loans an attractive option for borrowers seeking speed, affordability, and flexibility.
Best for providing a human touch: Loan Depot
Quick Facts
Minimum credit score: 620 for conventional mortgages, 500 for FHA loans
Loan types: Fixed-rate, ARM, VA, FHA
Learn more: Loan Depot
Why we chose Loan Depot as a best online mortgage lender
LoanDepot has become one of the nation’s biggest players in mortgage loans, and for good reason. One of its innovative offerings is the "mello smartloan," a completely digital mortgage solution allowing users to skip paperwork by smartly and quickly connecting the borrower’s income, assets and employment to significantly speed the loan process.
Besides its digital prowess, LoanDepot also offers the human touch with more than 200 physical branches nationwide for in-person assistance. While the company has managed to close loans in as little as a week, borrowers should expect timelines of 30, 45, or 60 days.
Best for fast approvals: Ally
Quick Facts
Minimum credit score: 620 for conventional loans; 700 for jumbo loans
Loan types: Fixed-rate, ARM, jumbo
Read more: Ally Bank review
Why we chose Ally as one of our best online mortgage lenders
Ally online mortgage loans offer a set of compelling benefits catering to a diverse range of borrowers. A standout is the customization of rate quotes. By simply entering pertinent details like home price and credit score into a tool on Ally’s website, borrowers can receive a rate quote tailored specifically to their financial situation.
Ally also provides access to Fannie Mae’s HomeReady loan, which is especially beneficial for those who may not meet traditional lending requirements. This loan option requires a minimal 3% down payment, making homeownership more accessible to a broader audience.
Ally is also competitive when it comes to interest rates. Recent federal data finds Ally’s rates on the low side compared to other lenders. These advantages make Ally online mortgage loans an attractive option for those seeking customization, flexibility, and affordability.
Best for commitment to minority lending: New American Funding
Quick Facts
Minimum credit score: 620 for conventional loans
Loan types: Fixed-rate, ARM, jumbo, FHA, VA, reverse, others
Learn more: New American Funding
Why we chose New American Funding as a best online mortgage lender
New American Funding distinguishes itself with a mission that goes beyond the conventional mortgage market. With more than 170 branches nationwide, the lender puts special emphasis on "serving the underserved." It has set ambitious targets to provide $25 billion in loans to Hispanic borrowers by 2024 and $20 billion to Black borrowers by 2028, underlining its commitment to financial inclusivity.
Adding to its uniqueness is the "I CAN Mortgage" program, which offers unparalleled flexibility by allowing borrowers to select a repayment period ranging from eight to 30 years. This enables homeowners to tailor their mortgages to their individual financial situations.
New American Funding also offers a variety of loan types that are not publicly advertised on its website, including jumbo loans and non-qualified mortgages (non-QM). These diverse offerings and social commitments make New American Funding a compelling choice for borrowers seeking both flexibility and inclusivity.
Best for variety of options: Homefinity
Quick Facts
Minimum credit score: 620 for conventional loans; 600 for FHA loans and VA loans
Loan types: Fixed-rate, ARM, FHA, VA
Learn more: Homefinity
Why we chose Homefinity as a best online mortgage lender
Homefinity offers a seamless mortgage experience tailored to your convenience. Whether you prefer to apply online, by phone, or through their Xpress app, the process is designed to be as straightforward as possible. One standout feature is their round-the-clock loan originators. You'll communicate with the same expert from the initial consultation to the final paperwork, ensuring a personalized and consistent experience.
Time-sensitive? Homefinity has you covered with real-time pre-qualification and the option for same or next-day pre-approval. This quick turnaround can give you the competitive edge you need in today's fast-paced real estate market.
Best for speedy pre-qualification: SoFi
Quick Facts
Minimum credit score: 620 for conventional loans
Loan types: Fixed-rate, ARM, jumbo, FHA, VA, others
Learn more: SoFi
Why we picked SoFi as a best online mortgage lender
SoFi offers a variety of mortgage products, including conventional, jumbo, VA, and FHA loans. Not all government-backed loans are on offer, but SoFi does allow first-time homebuyers to put down as little as 3%. SoFi's preapproval process is quick and easy, and borrowers can pre-qualify online in minutes.
The average closing time is 28 days. SoFi also offers a $5,000 guarantee that your loan will close on time. If it doesn't, and SoFi is responsible for the delays, the lender will credit you up to $5,000 toward closing costs or other additional expenses. SoFi mortgages are available in every state and Washington D.C., though refinancing isn’t available in New York.
Best for unique perks: Rocket Mortgage
Quick Facts
Minimum credit score: 580 for VA loans
Loan type: Fixed-rate, ARM, jumbo, FHA, VA
Learn more: Rocket Mortgage
Why we like Rocket Mortgage as a best online mortgage lender
Previously known as Quicken Loans, this online lender simplifies your search with a user-friendly mortgage comparison tool. You can also breeze through the application process online, getting pre-approved without leaving your living room. Unique perks like a no-closing-cost mortgage option set Rocket Mortgage apart.
Although no-down-payment loans like VA loans are common, the no-closing-cost feature is a rarity. Whether you're a homebuying novice or a seasoned homeowner, Rocket Mortgage equips you with valuable resources.
Rocket’s Learning Center is a treasure trove of articles on mortgage essentials, and the site offers a variety of calculators to guide your decision-making.
Best for applicants with poor credit: Mr. Cooper
Quick Facts
Minimum credit score: 620 for conventional loans; 580 for FHA loans; 600 for VA loans
Loan type: Fixed-rate, ARM, jumbo, FHA, VA
Learn more: Mr. Cooper
Why we chose Mr. Cooper as a best online mortgage lender
Mr. Cooper stands out by providing multiple ways to lower your expenses, including a 1% discount for the first year and an option to waive future refinancing fees. This can result in substantial savings over the life of the loan.
Mr. Cooper's highly-rated mobile app offers added conveniences like the ability to monitor home equity and property value, making it easier to manage your investment.
Finally, recent federal data shows Mr. Cooper's mortgage rates are lower than a lot of other lenders. Mr. Cooper, however, doesn’t offer home equity lines of credit or renovation loans.
What is an online mortgage?
Online mortgage lenders allow borrowers to research, apply for, and manage their mortgage without needing face-to-face interactions with traditional banking representatives. Leveraging digital technology, online mortgage providers streamline the application process, often offering real-time loan comparisons, quicker approvals, and sometimes more competitive annual percentage rates.
This digital-centric approach emphasizes user experience, efficiency, and transparency, making it a popular choice among tech-savvy consumers and those seeking convenience in the home-buying or refinancing process.
How do the best online mortgages work?
Imagine you want to buy a home, but instead of heading to the bank to meet the mortgage broker, you cozy up on your couch with your laptop. Online mortgages let you do just that.
Here's how it works:
Research: Websites offer tools to help you figure out how much you can borrow and what your payments might look like.
Application: Fill in your details on the website. This typically includes information about your income, savings, and debts.
Documents: The website will tell you what documents to upload, such as pay stubs or bank statements – like attaching files to an email.
Review and approval: The online lender checks your info, often faster than traditional banks. They'll then tell you how much they're willing to lend.
Closing: If everything looks good, you'll finalize the deal, sometimes in-person, sometimes online.
Online mortgage pros and cons
Pros
- Convenience: Apply from the comfort of your home at any time. No need for face-to-face appointments or paper documentation in many cases.
- Speed: Digital platforms often result in faster pre-approvals and closings, thanks to automated processes.
- Comparison tools: Many platforms allow you to easily compare rates and terms from different lenders, helping you secure the best deal.
- Potentially lower rates: Online lenders often have lower overhead costs and may pass those savings onto consumers in the form of competitive rates.
- Educational resources: Online platforms frequently offer tools, calculators, and articles to guide borrowers, aiding informed decision-making.
Cons
- Less personal interaction: Some borrowers value the face-to-face counsel and personalized service of traditional lenders, which online platforms might lack.
- Overwhelming options: With so many online lenders and products, it can be daunting to discern which is the best choice for your needs.
- Security concerns: Transmitting sensitive information online always carries a risk. It's crucial to ensure the lender's platform is secure and trustworthy.
- Potential for hidden fees: While many online lenders offer competitive rates, some may have hidden fees or terms that aren't immediately apparent.
- Technology glitches: As with any digital platform, there's potential for technical issues that might disrupt the application or management process.
Things to consider when choosing an online lender
Before you click 'apply', let's break down some of the most important things to consider when choosing an online mortgage lender.
Reputation and reviews: Start with online reviews. What are people saying about their experiences? Remember, one or two negative reviews might not represent the whole picture, but a slew of unhappy customers is a red flag. Has the lender won any awards or accolades? Reputable lenders will often be recognized by industry peers.
Interest rates and fees: This one's a no-brainer: A lower interest rate can save you thousands over the life of the loan. But be wary of rates that seem too good to be true. Scrutinize the fine print. Some lenders lure you in with low rates but make up for it in fees. Look for application fees, origination fees, and other hidden costs.
Digital experience: Convenience is king. If the lender’s website feels like it's from the 90s, it's a sign of how they might handle other aspects of their business. This is also a good time to ensure the lender's website uses up-to-date security measures to protect your personal and financial details.
Customer service: Test the waters. Send them a query and see how quickly and thoroughly they respond. You want a lender who's there when you have questions. Also ask about human support: While everything might be online, it's reassuring if there's a human at the other end, be it via chat, email, or phone.
Loan variety: Make sure the lender offers the type of loan that suits your needs, be it a 30-year fixed, an adjustable rate, or something more specialized like a jumbo loan. Consider vendors who offer flexible terms, especially if you anticipate changes in your financial situation.
Methodology: How we chose the best online mortgage lenders
At Moneywise, our top priority is to empower our readers with accurate and unbiased information about a wide range of financial products. We firmly believe in the importance of providing transparent and reliable reviews, which is why we go to great lengths to ensure that our evaluations are free from any marketing or affiliate influences that could affect our objectivity.
To achieve this goal, our team of experienced writers follows a rigorous set of criteria when reviewing each product. We examine all aspects of the product, including its features, benefits, drawbacks, and any potential limitations. We also take into account factors such as customer service, reputation, and pricing to provide a comprehensive and detailed analysis of each product.
At the end of the review process, we assign a unique score to each product based on our assessment of its quality and value. We believe that this approach enables our readers to make informed decisions about their financial choices and helps them navigate the complex world of financial products with confidence and ease.
Best online mortgage lenders FAQs
