3 of the Best and Worst Mortgage Lenders
Though mortgage lenders all do the same essential service -- offer loan products to customers -- they are not all the same. Some lenders charge higher fees for the same services, such as application and underwriting costs, according to Forbes.
See: 7 Financial Habits That Improve Your Daily Life
Find: 20 Home Renovations That Will Hurt Your Home's Value
Also, depending upon the size of the lender, the number of locations and other factors, some lenders can get you better rates. Other criteria that can make one lender better than another include speed of the loan application process, customer service and location. Based on these criteria, here are three of the best and worst mortgage lenders, but keep in mind that everyone's experience may be different.
Best: New American Funding
ConsumersAdvocate.org chose New American Funding as their top choice for lenders in 2022 because of several criteria, including: historically low rates; complimentary pre-approval; the ability to apply for a mortgage online and talk with live agents, and down payment and first-time homebuyer assistance programs.
This lender serves all states except Hawaii and New York. Homebuyers can obtain loans with a minimum of 3% down payment, and a credit score of 620 or better. For a small, regional lender, New American provides in-house loan servicing, and offers flexible terms. They also were marked high on good customer service and transparency.
According to NerdWallet, they offer a wide variety of loan products, including: Purchase, Refinance, Home Equity, Reverse, Jumbo, Fixed, Adjustable, FHA, VA, USDA.
Best: Quicken Loans
Quicken Loans (now known as Rocket Mortgage) is one of the largest online mortgage lenders in the U.S. On the plus side, because they have such a huge network of lenders, borrowers are more likely to find a loan option at a low interest rate and with payment terms that work for them.
Additionally, according to ConsumersAdvocate.org, they've got a streamlined digital closing system down that makes signing all the paperwork simple and convenient. Homebuyers can obtain loans with a minimum of 3% down payment, and a credit score of 620 or better. They also scored an A+ from the Better Business Bureau.
According to NerdWallet, they offer the following loan types: Purchase, Refinance, Jumbo, Fixed, Adjustable, FHA, VA. The downsides are that they don't offer home equity loans, and sometimes lenders fees can be high.
POLL: Where Have You Cut Back Most Because of Inflation?
Best: Better
Forbes picked Better as one of their top choices for mortgage lenders because of their penchant for convenience and speed. Not only is the application process completely digital, but they have a swift pre-approval turnaround -- as little as 20 minutes.
Their closing time also averages 32 days, which is about 10 days less than the industry average. This lender also actively seeks out discounts that borrowers may be eligible for, without any additional cost.
Better yet, they don't charge commission or lender fees for anything from application to underwriting or origination fees. They state that this saves 1% of the loan amount, or about $19,000 on average, over a loan's life. Better services all 50 states except for Nevada -- including Hawaii, Massachusetts, Minnesota, New Hampshire, Vermont and Virginia -- along with Washington, D.C. You need a minimum credit score of 620 to apply.
Worst: DHI Mortgage
This Texas-based mortgage lender seems to have done more wrong than right. In addition to being found to charge too much interest by California's Department of Business Oversight in 2013 and 2017 (for which they had to pay penalties to settle claims), according to a statistical survey by The Markup, this lender also has a bad track record lending to minority applicants.
They found it was 160 percent more likely to deny Black applicants, and 100 percent more likely to deny Latino applicants compared to white applicants.
Worst: Sage Mortgage
For a borrower who wants a lot of options and the ability to purchase in a wide variety of states, Sage Mortgage is probably not the right choice for you, because it's a relatively new mortgage lender and only available in the following states: California, Colorado, Florida, Georgia, Minnesota, North Carolina, Oklahoma, Oregon, South Carolina, or Texas.
This lender is really best for those who are comfortable with a do-it-yourself approach, who don't need a lot of handholding. Also, loans are capped at $548,250, which can limit where you might want to buy. Additionally, you need a credit score of 660 to apply.
More: 3 of the Best and Worst Companies for Life Insurance
Worst: Chase Bank
Chase is one of the biggest U.S. banks and mortgage lenders. Like other lenders, they have a variety of loan products and can facilitate minimum down payments of 3% and up.
However, US News and World Report ranked them only a 3.7 out of 5 on the affordability scale as compared to other lenders, and they only got a B+ from the Better Business Bureau. Bigger lenders can sometimes take longer to close on a loan, as well. Chase charges fees for such things as origination, underwriting and rate-lock fees.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: 3 of the Best and Worst Mortgage Lenders
