Buying a home can be an exciting experience, but it can also have serious financial ramifications if you don't research lenders before applying for a mortgage. Some mortgage providers are unable to offer the lowest mortgage rates accessible today due to hefty closing expenses and fees. If you don't shop around and end up with a bad loan, you might easily end up paying thousands of dollars in interest for no reason.
Comparing mortgage rates and terms is critical because your mortgage will most likely be in place for at least 15 to 30 years.
For this reason, we developed a list of the top mortgage lenders and rates to assist you in determining which lenders are reputable and which give the best mortgage rates in your area.
Mortgage Rates Right Now
You may look for current mortgage rates in your area by selecting your state below. Keep in mind that various factors, like your downpayment and credit score, influence the exact rate you will receive.
In 2021, which lenders will have the best mortgage rates?
Take the time to evaluate interest rates, fees, and customer service ratings among the top lenders on the market today before moving forward with a house loan. Based on their rates, reputation and ratings, and online loan platforms and features, the following lenders made our list of best mortgage lenders.
- Quicken Loans
- Bank of America
- Home Loans for Vets
- Huntington Bank
Quicken Loans (#1)
It's simple to see why Quicken Loans is regarded as one of the best mortgage lenders in the country. Quicken Loans not only has some of the most competitive interest rates on the market today, but they also provide a fully online mortgage process that allows you to skip going to a local branch to get your loan started.
Quicken Loans even has a tool called RateShield that allows you to lock in your mortgage rate for up to 90 days while you look for a property or finish your loan. You can apply for a home loan online, but you can also get assistance by calling their 1-800 number.
Quicken Loans also has an online chat function that allows you to obtain answers to all of your inquiries before you apply.
It makes better use of current technology to modernize the mortgage process. What was once a stressful and complicated process has been simplified. Better applications result in faster closings because of its 100 percent online methodology. It also doesn't charge any commissions or fees, saving borrowers a lot of money.
While Better doesn't provide some products, such as a HELOC or a VA loan, its mortgage prices are often competitive (which it credits to its investor-matching technology). After completing a few questions, applicants will be given a quote in minutes.
Amerisave is an online mortgage provider that advertises incredibly low rates and a straightforward digital mortgage application process. You can apply for a mortgage online and upload all required papers, and Amerisave will even send a representative to your home to finish the closing procedure on the time and day of your choosing.
Amerisave offers a variety of fixed-rate and adjustable-rate mortgage loans with a variety of repayment options and some of the most competitive rates available today.
Chase is well-known for its popular credit cards, checking accounts, and savings accounts, but they also have a competitive mortgage option.
Chase even allows you to get prequalified for a mortgage without putting a hard query on your credit report, making it simple to obtain an estimate of the mortgage rates you'll qualify for — and how much you might be able to borrow —before submitting a full application.
Chase, like Quicken Loans, offers a diverse choice of mortgage alternatives, including 30-year and 15-year fixed-rate mortgages, as well as adjustable-rate mortgages. Chase also provides useful tools to assist you in figuring out your new home loan payment, deciding how much you can borrow, and more.
Bank of America (#5)
Bank of America promises a more easy "digital" mortgage experience than working with a traditional bank. You may get prequalified online without putting a hard inquiry on your credit report, and you'll have access to helpful tools to help you find the best loan for your circumstances.
Bank of America offers both fixed-rate and adjustable-rate mortgages, so you're sure to find one that works for you. Existing Bank of America customers who are members of their Preferred Rewards program are also eligible for closing cost savings and other benefits.
Veterans United Home Loans (#6)
Veterans United Home Loans connects veterans, active military, and qualifying spouses to low-interest VA loans with simple borrowing requirements. On the other hand, Veterans United isn't an alternative for clients who don't meet military activity eligibility conditions.
VA loans might be highly appealing for individuals who qualify because they have low credit standards and no money down. Although there is an initial funding charge, VA loans do not require private mortgage insurance or PMI.
Veterans United Home Loans is one of the top lenders to consider if you plan to use the VA loan program.
If you want to compare loan products and get prequalified online in a matter of minutes, loanDepot is a good option. This mortgage lender provides mortgage loans for new home purchases and refinances, and depending on your creditworthiness, and you may be able to qualify for incredibly cheap rates.
If you want a more personalized experience, loanDepot may link you with a personal loan counselor who will assist you in finding the right loan for your needs.
Huntington Bank (#8)
Huntington Bank also has a powerful online mortgage platform that allows you to compare loan alternatives quickly and easily. They provide fixed-rate and adjustable-rate mortgages to suit a wide range of needs, and interest rates can be very competitive depending on your creditworthiness and other criteria.
If you want to buy a new house or refinance an existing mortgage but want to consult with a local mortgage counselor, Huntington Bank is a good alternative.
How to Find the Most Affordable Mortgage Rates
Borrowers with great credit, a steady income, a long work history, and the capacity to put down a sizable down payment often get the best mortgage rates. This implies that, in order to qualify for the best mortgage rates available today, you may need to improve your financial condition before applying.
Here are some pointers to assist you to become a more appealing borrower or changing your house loan to get the best rate:
Shop around with a variety of lenders
The easiest approach to ensure you're getting the best rate possible is to shop around with multiple different lenders.
You can do this by comparing numerous lenders and loan options or by applying for a new mortgage through a loan aggregator like LendingTree, which allows you to evaluate multiple loans and rates in one spot.
Individual lenders have their own criteria for determining who can be authorized, and rates can be higher or lower depending on how appealing you are to them as a borrower. Shopping around is essential.
Before you apply for a house loan, we recommend that you compare mortgage rates with at least two to four lenders. Make sure to inquire about and compare closing charges and fees, as well as online account management alternatives, in addition to mortgage rates.
Think about joining a credit union
You can compare mortgage rates and loans offered by credit unions in your area, in addition to traditional banks and online lenders. While you must be a member of a bank to use a credit union, because they are not-for-profit, they can sometimes provide cheaper interest rates than for-profit lenders and banks.
Also, keep in mind that if you aren't currently a member, you may be able to join a credit union with simplicity. Credit unions may charge up to $25 to join. Still, you may be qualified for membership depending on where you reside, what communities you're interested in, your job, military service, and other circumstances.
Examine Mortgage Programs Backed by the Government
Investigate government-backed mortgage programs such as FHA, VA, and USDA loans. Because these lending programs are backed by the federal government, you may be able to qualify for cheaper mortgage rates and better terms even if your credit isn't ideal.
Just keep in mind that government loan programs normally come with a cost, even if they offer a reduced interest rate.
FHA loans, for example, allow you to start with a down payment of as little as 3.5 percent of your loan amount if your credit score is at least 580. Still, they also require upfront mortgage insurance and ongoing mortgage insurance premiums that cannot be canceled during the life of your loan — even if you have more than 20% equity.
Boost Your Credit Score by Taking Action
Your credit score is also a significant aspect that influences your mortgage rate. While a FICO credit score of 680 or higher is generally considered "excellent," if you can improve your credit score to a higher level, you may be eligible for better rates on a standard house loan.
While there are other elements that influence your FICO score, bear in mind that your payment history and the amount you owe in relation to your credit limits are the two most important. As a result, paying all of your obligations on time or early and reducing debt can have a big influence on your credit score quickly.
Make a larger down payment by saving more money
Another element that influences your mortgage rate is the amount of money you can put down on the house. When buying a home, most traditional lenders encourage borrowers to put down at least 20% of the purchase price, and they frequently provide the best rates to those who can meet this requirement.
You may find that your home loan alternatives are limited if you don't have a down payment or if your down payment is small. Many lenders want a 5% down payment, and even FHA loans require 3.5 percent, so you should start saving now to ensure you get the loan you want at a rate and payment you can manage.
Reduce the length of your loan
The most common type of mortgage is a fixed-rate mortgage, which has a fixed interest rate and a fixed monthly payment (principal and interest). If you wish to pay off our home faster, you don't have to take up a 30-year mortgage.
Many lenders provide fixed-rate mortgages for 20 years, 15 years, and even ten years.
Even better, fixed-rate mortgages with shorter repayment periods typically have lower interest rates. This means you'll be able to pay off your mortgage sooner while still paying less interest.
Think about other mortgage loan options
Many lenders also provide adjustable-rate loans in addition to fixed-rate mortgages. ARMs, or adjustable-rate mortgages, allow borrowers to pay a reduced fixed rate for a limited time before reverting to market rates once the introductory period has ended.
Whereas fixed-rate mortgages are appropriate for people who want to stay in their house for a long time, adjustable-rate mortgages can be a decent deal for people who desire a low initial rate but plan to move or refinance their home within a few years.
Points must be purchased
Mortgage points, also known as mortgage discount points, allow borrowers to pay a one-time fee in exchange for a lower mortgage rate on their home loan. One point, which often amounts to a.25 percent rate reduction, typically costs 1% of your mortgage amount or $1,000 for every $100,000 borrowed.
While paying for points may not make sense if you only expect to stay in your house for a short period of time, the savings can be substantial if you want to stay for a long time.
Join a Loyalty Program Run by a Bank
Finally, keep in mind that some mortgage lenders give customers who utilize their own banking and loan products preferential rates and terms. For example, Citibank and Bank of America both provide mortgage rate discounts or closing cost reductions to customers who bank with them and meet certain conditions.
If you join Bank of America's Preferred Rewards program, for example, you can receive a greater rate of rewards on their rewards credit cards and save money on your home loan's origination charge.
What Are the Most Affordable Mortgage Rates?
While mortgage rates are out of your control, there are steps you can do to increase your chances of qualifying for better rates and terms. For starters, you can shop around and compare lenders, but you should also work on improving your credit and financial circumstances to make yourself a more appealing borrower overall.
As you explore for ways to get into the best loan possible, consider the lenders on our list first. They offer some of the finest mortgage rates and loan terms available today.