The 11 best online mortgage lenders
Online mortgage lenders specialize in end-to-end digital lending. They let you get pre-approved, turn in your loan documents, and sometimes even close the deal, all without having to show up in person.
Thanks to their low overhead costs, some online mortgage lenders can also offer below-average interest rates and fees. But costs and mortgage rates vary for each borrower, so make sure you shop around.
|Average Customer Review Score (out of 5)1||Average 30-Year Mortgage Rate (2020)2|
|Guild Mortgage Co.||5.0||3.15%|
|New American Funding||4.9||3.18%|
|Bank of America||4.6||3.19%|
|Caliber Home Loans||4.5||3.25%|
Editor’s note: The Mortgage Reports may be compensated by some of these lenders if you choose to work with them. However, that does not affect our reviews. See our full editorial disclosures.
In this article (Skip to...)
- Find your best lender
- Best online lenders
- About online mortgages
- Pros and cons of online lenders
- Refinancing online
- First-time home buyers
- Recap: Best online lenders
Remember to look for your best mortgage lender
Below you’ll find out why we chose each of the following companies as the 11 best online mortgage lenders.
Remember, each borrower is likely to get a different rate and loan costs from each lender. And you may well find that number 11 on our list can offer you a better deal than number one.
So make a shortlist of the lenders you think might suit you, and then apply for quotes from at least 3-5. You can then compare interest rates and closing costs side by side to see which lender is offering the best deal.
Borrowers who comparison shop often save hundreds or even thousands over the life of their mortgage loan. So don’t skip this step!
The potential savings you could see are well worth the few hours you’ll spend filling out loan applications and checking rates.
The best online mortgage lenders in 2022
1. Guild Mortgage Co. — Best customer service (tie), low average interest rates
Guild Mortgage Company scores a perfect 5.0 in our survey of online customer reviews. And that says a lot about its offerings and service levels.
Guild’s average mortgage rate in 2020 wasn’t the lowest on our list. But it was way lower than most.
So this is a great allrounder. And it’s no wonder that Guild took the No. 1 spot on our list of the Best Mortgage Lenders as well as the top spot for the best online lenders.
If you want an affordable mortgage and a streamlined online experience, Guild may be worth a look.
2. Movement Mortgage — Best customer service (tie)
Movement Mortgage tied with Guild for online customer reviews, scoring a perfect 5.0. So its existing customers clearly love it.
And borrowers can feel good about working with Movement Mortgage. Because all its profits go to the nonprofit Movement Foundation, which distributes them in charitable giving.
The only reason for Movement being nudged into second place was its slightly higher average mortgage rates in 2020. But averages can be skewed by lenders who are willing to work with lower-credit borrowers. So there’s no reason to think Movement can’t give you a good deal if you have solid credit and a good down payment.
In other words, you won’t know how good a deal you can get until you check. So get a custom rate from Movement if you’re interested in this company.
3. AmeriSave — Lowest average interest rates
AmeriSave lives up to its name with the lowest average mortgage rate in 2020 of all those on our list. And, for many, that will be all they need to know.
Yes, we find AmeriSave’s online customer reviews a little disappointing. But no lender makes our list if we think its customer service is a serious issue.
And many will happily trade occasional, minor inconveniences for such ultra-low rates.
4. New American Funding — Excellent customer service
NAF’s average mortgage rate in 2020 was higher than some. But, again, that could be due to its willingness to help applicants with less-than-perfect finances.
You won’t know how good a rate NAF can give you personally without asking for a quote. And that goes for all the lenders on our list.
5. NBKC — Excellent customer service
NBKC (a.k.a. National Bank of Kansas City) is another lender with a near-perfect 4.9 in our survey of online customer reviews.
And don’t be put off by its name. NBKC is licensed to lend in all 50 states. Still, with only four branches, you’ll probably want to take advantage of its online services and telephone support.
NBKC’s average mortgage rate in 2020 was higher than most of those on our list. But that’s still very low by industry-wide standards. And you might find you beat its averages if you ask for a quote.
6. Guaranteed Rate — Helpful online tools
Guaranteed Rate says, “We created the world’s first digital mortgage, so easy that an application takes less than 15 minutes.” And it’s certainly known for its advanced technologies.
Guaranteed Rate’s 2020 average mortgage rate and its online customer review scores are both mid-range for our list. But our list comprises the best of the best.
And, as with all these lenders, you won’t know how good a deal you could get unless you request a quote.
7. Bank of America — Home buyer grants for eligible borrowers
Big-name banks don’t always make best mortgage lender lists. But Bank of America is an exception because it has some pretty special offerings.
Besides its slick “Digital Mortgage Experience,” BofA offers cash home buying assistance to qualified borrowers in select states.
Some home buyers could get up to $7,500 toward their closing costs and up to $10,000 in down payment assistance. Existing Preferred Rewards clients may also be in line for a discount on the bank’s origination fee. Check Bank of America’s website for terms and conditions for all these.
Bank of America’s average mortgage rate in 2020 and its score for online customer reviews are both mid-range on our list, which means they’re highly competitive. But those assistance programs and discount might swing it for some.
8. Caliber Home Loans — Wide variety of loan options
Caliber Home Loans says its advanced technologies let it “take eligible borrowers from application to closing in record time — as little as 10 business days.” So this might be your top choice if you have a straightforward application and are in a hurry.
Caliber’s average mortgage rate in 2020 was higher than others on our list. And its online customer review score was among the lower ones.
However, Caliber is a large and highly regarded lender. And you may find it offers you personally a low rate if you apply.
9. SoFi — Discounts for current members
SoFi (Social Finance, Inc.) celebrated its 10th birthday in 2021. But it already has more than 2 million members and has funded mortgage loans worth $50+ billion.
So it’s clearly getting a great deal right. And, if you’re already one of those 2 million SoFi members, you could be in line for a $500 discount on your mortgage closing costs.
SoFi’s average mortgage rate in 2020 was higher than most others on our list. And its score for customer reviews was lower than some. But, as we keep saying, ask for a quote to see if you could get a better-than-average deal from this lender. It might be the best you can get.
10. Veterans United — VA loan specialist, low avg. interest rates
Veterans United specializes (and is market leader) in VA loans, which are available only to military veterans, those still serving, and a few small and closely related groups.
It does offer some other government-backed loans. But its focus is clearly on veterans and active-duty service members.
Veterans United had the third-lowest average mortgage rate in 2020 among those on our list — as it should have. VA loans typically have lower rates than other types of mortgages. And VU did spectacularly well in the J.D. Power 2020 U.S. Mortgage Satisfaction Study, in which it took third place overall.
If you want a VA loan, Veterans United is a shoo-in on almost any short list.
11. Freedom Mortgage — VA loan specialist, low avg. interest rates
Freedom Mortgage is another specialist in VA loans. But it’s more willing to work with borrowers with financial issues than Veterans United.
Freedom will consider your VA loan application if your credit score is as low as 600, while Veterans United often wants a 640 minimum. And yet, Freedom had a lower average mortgage rate in 2020 than Veterans United. Indeed, that average rate was the second-lowest on our list.
If you want a VA loan, it may be worth asking both Freedom and Veterans United for a quote to see which can offer the best deal.
How we chose the best online mortgage lenders
We chose the best online lenders using the following criteria:
- Rates and fees — Based on 2020 averages submitted to the government by each lender
- Flexibility — Each lender’s minimum credit score and down payment requirements
- Loan options — The breadth of each lender’s portfolio of mortgage products
- Customer service — Using customer reviews and ratings on public, online forums, including Zillow, Bankrate, and LendingTree
Of course, shopping for a home loan is personal. And you’re naturally going to care about some criteria more than others.
For example, if you have a stellar credit history, you won’t mind a lender with a high minimum credit score. Or, if you’re shopping for a USDA loan, your choices might be narrowed to the companies offering this type of mortgage.
But everyone’s likely to be concerned about mortgage rates and fees. And most should pay attention to each lender’s customer service scores.
Make sure you shop around and get rate quotes from a few of the best online mortgage lenders to find one that suits you.
What is an online lender?
Most mortgage lenders — including big-name banks and credit unions — let you apply online.
But many of these online applications simply feed your information into a traditional mortgage process. Soon enough you’ll end up dealing with loan officers who work within sometimes frustrating bureaucracies.
True online lenders have automated the entire mortgage process, at least as far it’s visible to the borrower. (There may still be some manual processing on the back end.)
True online lenders have automated the entire mortgage process from application through to closing.
With your permission, an online lender’s IT system
s can reach out directly to your bank, the IRS, and other automated systems to verify your loan application.
Unless the computer spits out a query that needs human eyes, nearly everything happens automatically.
With luck, you may never have to field a call or take a meeting. Some online mortgage companies even let you e-sign your closing documents.
That said, some borrowers may still prefer the in-person lending experience. And there are still plenty of mortgage companies who offer it.
For more options, see:
Pros and cons of online mortgage lending
The best online mortgage lenders can deliver real advantages. But, to some, they also bring drawbacks.
Here’s an overview of the pros and cons of online mortgage lending:
Benefits of online mortgage lenders
- Online lenders often have lower fees. By cutting their human labor costs, they can pass on their savings to you
- For the same reason, some have below-market interest rates. But not all. So you still need to shop around for the best deal
- Stats say online loans close faster on average. A Federal Reserve report probed the efficiency of “Fintech” (finance technology) lenders compared to traditional ones. It says: “We find that FinTech lenders process loans 7.9 days faster than non-FinTech lenders.” And there are … even larger effects for refinances. Across specifications, FinTech lenders process mortgages 9.3 to 14.6 days faster than other lenders”
- And of course, the digital application process is more convenient for you as a borrower
Drawbacks of online mortgage lenders
- Online lenders tend to be better at “vanilla” mortgages than special loans. If your needs are outside the mainstream, maybe because your credit or income are a bit iffy, you may be better off working with a traditional lender
- Plenty of people still value the human touch. Building a relationship with your loan officer can help you through the process
- An e-closing can have its downsides. You might prefer an expert on hand to answer your last-minute queries
- Online lenders might have a smaller range of mortgage options. Research your shortlist first so you apply only to those that meet your needs and are comfortable working with borrowers like you
For most borrowers, online lenders can offer solid advantages in terms of competitive rates, fees, and closing times.
Is that enough to swing you? Or do you prefer the human touch? Only you can decide.
Refinancing with an online lender
Online mortgage lenders can be a great option for refinancing your home.
Refinancing means you replace your current mortgage with a new one — usually with a lower interest rate or a shorter loan term, or both.
Once you’ve built up some equity in your home you can also apply for a cash-out refinance. This is a type of refinance loan that pays off your existing mortgage and provides extra cash you can use for remodeling your home, consolidating credit card debt, or for any other purpose.
Many online lenders also offer second mortgages such as home equity loans or a home equity line of credit (HELOC).
A HELOC, cash-out refinance, or home equity loan won’t be an option unless you have home equity.
Equity refers to the part of the home’s value you own. If your house is worth $250,000 and you owe $150,000 on your mortgage loan, your equity would be $100,000.
First-time home buyers’ guide to online mortgage loans
If you’ve gotten a home loan before, you likely already know the lingo and won’t have trouble navigating an online mortgage application.
But one of the cons of the online mortgage process is its difficulty level for first-time homebuyers who may not be sure what kind of mortgage they need. Getting the wrong type of loan can cost you, both in monthly payment amount and interest paid over the life of the loan.
If you’re considering one of the best online mortgage lenders but you’ve never been a homeowner before, you’ll want to know these basics before applying.
Types of home loans
Home loans generally fall into three categories:
- Conventional loans — About 3 in 5 home loans are conventional mortgages. These mortgages tend to be most affordable if you have a bigger down payment and higher credit score
- Government-backed loans — These include VA loans, USDA loans, and FHA loans. All three offer special benefits for homebuyers, from lower credit requirements to zero down payment and affordable mortgage insurance
- Jumbo loans — If your loan amount is above the conforming limit set by Fannie Mae and Freddie Mac, you might need a jumbo loan. This could be the case if your new home’s purchase price is in the range of $700,000 or higher (depending on your location and down payment)
Qualifying for a mortgage loan
Online mortgage lenders will always check your credit report and score. Someone with excellent credit and a low debt-to-income ratio can usually qualify for the best mortgage rates.
However, contrary to some advice you might see online, many home buyers can get a mortgage with a low down payment (or possibly no down payment at all).
Here are some of the basic requirements to qualify by loan program.
- Conventional mortgages normally require at least a 620 credit score and a debt-to-income ratio of 43 percent or less. But different lenders can set their own criteria. Conventional loans require a down payment of at least 3 percent
Government-backed loans have different qualifications.
- FHA loans have a minimum credit score of 580, and you’d need to put at least 3.5 percent down
- USDA loans allow no down payment and usually require a credit score of 640 or higher. The home must also be in an eligible rural or suburban area
- VA loans also allow no down payment, and technically have no minimum credit score. But most lenders require at least 620. The borrower must qualify for VA backing based on their military service history
Adjustable-rate vs. fixed-rate mortgages
A fixed-rate mortgage locks in an interest rate and payment that won’t change throughout the life of the loan.
An adjustable-rate mortgage has a fixed rate for an introductory period, typically five or seven years. After this intro rate expires, the mortgage rate and monthly payment can change each year.
Most online lenders offer both loan products — fixed or adjustable-rate mortgages (ARMs).
Your loan term refers to the amount of time you’ll owe money on the home loan. A 30-year mortgage spreads your repayment across — you guessed it — 30 years.
Longer loan terms like 30 years offer lower monthly mortgage payments because the balance is spread across more payments. But you’ll also pay more in interest charges because of the longer term.
15-year fixed-rate mortgages typically offer lower rates than 30-year loans. However, monthly payments are quite a bit higher since the loan must be paid off in half the time.
Calculating a mortgage payment
Your monthly mortgage payment includes more than just principal and interest on the loan. There are other homeownership costs built-in, too.
Mortgage payments are determined based on:
- Your loan amount
- Your loan term
- Your interest rate
- Private mortgage insurance (PMI) if you put less than 20% down on a conforming loan
- Mortgage insurance premium (MIP) if you have an FHA loan
- Property taxes (included on your monthly payments)
- Homeowners insurance (included on your monthly payments)
- Homeowners association fees (HOA) if applicable
You can use a mortgage calculator to help estimate your mortgage payments and find your home buying price range.
Buying or refinancing real estate always comes with closing costs. These costs usually range from 2 to 5 percent of your home’s purchase price.
You can negotiate to lower some closing costs, such as the lender’s loan origination fee. But other costs, like the home appraisal or title search, come through third-party providers and can’t be avoided.
Some home buyers can get the seller to help pay closing costs; others may qualify for closing cost assistance programs.
If you’re refinancing, it may be possible to roll the lender fees into your loan balance.
Mortgage prequalification and preapproval
Mortgage prequalification is when the lender takes a first look at your credit and finances and gives you an estimate of how much money you can borrow.
A prequalification isn’t a commitment from the lender. It’s only an estimate of what you’re likely to qualify for. This can help you find your home shopping price range.
To actually make an offer on a house, you’ll need a pre-approval letter.
Pre-approval means the lender has verified important information on your application, such as your credit score and income.
Pre-approval is a commitment by the mortgage company to lend to you— provided all your info checks out in the final underwriting process.
Best online mortgage companies: Recap
Here’s a recap of our picks for the 11 best online mortgage lenders in 2022 and why we picked them:
- Guild Mortgage Co. — Best customer service (tie), low average interest rates
- Movement Mortgage — Best customer service (tie)
- AmeriSave — Lowest average interest rates
- New American Funding — Excellent customer service
- NBKC — Excellent customer service
- Guaranteed Rate — Helpful online tools
- Bank of America — Home buyer grants for eligible borrowers
- Caliber Home Loans — Wide variety of loan options
- SoFi — Discounts for current members
- Veterans United — VA loan specialist, low avg. interest rates
- Freedom Mortgage — VA loan specialist, low avg. interest rates
Remember, the best lender for you depends on your loan type, the home you’re buying, and your finances.
It’s important to find the lowest-rate loan — but it’s equally important to find the loan type you need and a lender that will help you qualify.
To find the best deal, get estimates from a few different lenders and compare your mortgage offers side by side.
1Average customer review scores sourced from LendingTree.com, Zillow.com, Bankrate.com, and J.D. Power’s most recent Primary Mortgage Origination Satisfaction Study where available for each lender
2 Average interest rates and loan fees based on the most recent self-reported data all lenders are required to file under the Home Mortgage Disclosure Act (HMDA)