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The 9 best online mortgage lenders for 2020

Peter Warden
The Mortgage Reports editor

The 9 best online mortgage lenders 

Online mortgage lenders specialize in end-to-end digital applications. 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 are also able to offer lower rates and fees than average. But costs vary for each borrower, so make sure you shop around.

Check your mortgage rates today. Start here (Aug 6th, 2020)

Lender

Minimum Credit Score

Minimum Down Payment

Average Loan Fees (as % of Loan Amount) 

NBKC

620 3.5% 0.83%

Better Mortgage

580 3% 0%

GuaranteedRate

580 3.5% 1.25%

Supreme Lending 

620 3.5% 1.18%

loanDepot

580 3.5% 1.72%

Rocket Mortgage by Quicken Loans

580 3.5% 2%

Reali

500 5% Not available

SoFi

660 10% 0.86%

Movement Mortgage

620 3% 1.72%

 

Check your mortgage rates today. Start here (Aug 6th, 2020)

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.


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Best online mortgage lender reviews

Below you’ll find out why we chose each of the following companies to be included in the nine best online mortgage lenders.

But first, a couple things to keep in mind while reading:

  • The numbers in this section use the most recent rate and fee data, from 2019
  • Average origination charges and median loan costs are a percentage of the transaction value
  • VA loans (guaranteed by the Department of Veterans Affairs) and USDA ones (backed by the Department of Agriculture) require a minimum down payment of 0%. But they are available only to eligible borrowers. So, where appropriate, we’ve shown them in brackets
  • The abbreviation “FRM” means “Fixed-Rate Mortgage”

1. NBKC (National Bank of Kansas City)

Although it’s the third-smallest lender on our list, NBKC scored highly across our criteria, including for mortgage rates and fees.

Better Mortgage did have lower fees — it’s hard to beat zero — but, NBKC’s equally low rates and customer reviews nudged it ahead into top place. Here are the key numbers.

NBKC Bank rates and requirements:

  • Median rate for 30-year FRM: 3.86%
  • Average origination charge: 0.20%
  • Median loan costs: 0.83%
  • Minimum FICO credit score: 620
  • Minimum down payment: 3.5% [0% for VA loans]
  • Overall customer reviews score: 4.87 out of 5

This is an outstanding online mortgage lender, well worth looking into if you want a digital application.

And for clarity, don’t let the name “Bank of Kansas City” put you off.

Though NBKC only has physical branches in its home city, it’s available online and over the phone in all 50 states.

>> Read the full NBKC review

2. Better Mortgage

You could argue that Better Mortgage is an … um, better lender than NBKC. Because it is, according to some of our criteria. It has zero lender fees and an easier credit threshold of just 580, for example.

However, Better is knocked down a peg by its customer reviews and its smaller range of mortgage types.

Only you can decide whether to ignore those and grab its great rates and zero origination fees.

Better Mortgage rates and requirements:

  • Median rate for 30-year FRM: 3.86%
  • Average origination charge: 0.00% (not a misprint)
  • Median loan costs: 0.32%
  • Minimum FICO credit score: 580
  • Minimum down payment: 3.0% [0% for VA or USDA loans]
  • Overall customer reviews score: 4.30 out of 5

Overall, Better Mortgage is another excellent — and affordable — lender, worthy of its name for many borrowers.

>> Work with Better Mortgage

3. Guaranteed Rate

Guaranteed Rate may have slightly higher average rates than some others, but it still has plenty going for it.

That includes low fees, excellent customer reviews, and a wide variety of loans, including those backed by both the VA and the USDA.

Guaranteed Rate rates and requirements:

  • Median rate for 30-year FRM: 4%
  • Average origination charge: 0.49%
  • Median loan costs: 1.25%
  • Minimum FICO credit score: 580
  • Minimum down payment: 3.5% [0% for VA or USDA loans]
  • Overall customer reviews score: 4.83 out of 5

That average mortgage rate is only slightly higher than the best. And, of course, you personally may qualify for a lower one. So Guaranteed Rate is likely to be a shoo-in for many borrowers’ shortlists.

>> Read the full Guaranteed Rate review

4. Supreme Lending

Supreme Lending may not always have the lowest rates. Yet its customers love it, scoring it top among the lenders on our list.

How come? Well, presumably Supreme Lending has exceptionally good service. Its median loan costs are low. And it offers a wide choice of mortgages, including a special program for teachers.

Supreme Lending rates and requirements:

  • Median rate for 30-year FRM: 4.38%
  • Average origination charge: 1.11%
  • Median loan costs: 1.18%
  • Minimum FICO credit score: 620 (May be lower for FHA loans)
  • Minimum down payment: 3.0% [0% for VA or USDA loans]
  • Overall customer reviews score: 4.93 out of 5

Don’t automatically rule out Supreme Lending just because of its rates. Its other qualities mean it may be worth paying a little more each month.

And, you won’t know the rate you’re going to be offered until you request a quote. Maybe yours will be below average.

5. loanDepot

loanDepot does well for mortgage rates and not badly for origination charges. And its customers are more satisfied than most, which is always a good sign.

loanDepot also offers FHA 203(k) loans, which help you finance a fixer-upper.

loanDepot rates and requirements:

  • Median rate for 30-year FRM: 3.99%
  • Average origination charge: 0.92%
  • Median loan costs: 1.72%
  • Minimum FICO credit score: 580
  • Minimum down payment: 3.5% [0% for VA loans]
  • Overall customer reviews score: 4.47 out of 5

Not to mention, loanDepot is a pioneer in the online mortgage lending space.

loanDepot is well known for its “mello smartloan” product, which it claims can close your loan in as little as 8 days (less than 1/3 of the time it normally takes).

That may not be true for every customer (especially those with “outside the box” mortgage applications), but it’s worth a look.

>> Work with loanDepot

6. Rocket Mortgage 

Rocket Mortgage is the all-online child of the Quicken Loans parent company. So you get all the advantages of working with America’s biggest mortgage lender — but digitally.

And those advantages are very real. Quicken has topped the J.D. Power mortgage originators’ rankings for the last 10 years straight.

Rocket Mortgage rates and requirements:

  • Median rate for 30-year FRM: 4.13%
  • Average origination charge: 1.26%
  • Median loan costs: 2.00%
  • Minimum FICO credit score: 580
  • Minimum down payment: 3.5% [0% for VA loans]
  • Overall customer reviews score: 4.47 out of 5

So Rocket is strong on its customer service, range of loans and the flexibility it can show over credit and down payment issues.

But those rates, origination charges, and loan costs look a bit steep. So be sure you compare your options to see that Rocket is your best deal.

>> Work with Rocket Mortgage

7. Reali Loans

Most of the data we use when assessing other companies seems to be unavailable for Reali (formerly Lenda). We’ve asked for the lender’s help in tracking down the information but had not heard back at the time of publishing this review.

Reali Loans rates and requirements:

  • Median rate for 30-year FRM: Unknown
  • Average origination charge: Unknown
  • Median loan costs: Unknown
  • Minimum FICO credit score: 500 (No, really)
  • Minimum down payment: 5%
  • Overall customer reviews score: 4.35 out of 5

Clearly, Reali stands out because it will consider applicants with credit scores as low as 500. On the plus side, its fees are reputedly low and its customer service good.

But, Reali has a limited reach compared to other online mortgage lenders. At the time of writing, Reali was licensed to lend only in the following states:

  • Arizona, California, Colorado, Florida, Georgia, Illinois, Michigan, Oregon, Pennsylvania, Texas, Virginia and Washington

8. SoFi

SoFi’s in our top-3 for rates, origination charges and loan costs, which for many are the most important points when picking a lender.

So what’s it doing down here near the bottom of our rankings?

Three reasons: First, SoFi’s credit score threshold is the highest, at 660 minimum. Secondly, it wants at least a 10% down payment. And thirdly, its customer reviews are the second-to-last on this list.

SoFi mortgage rates and requirements:

  • Median rate for 30-year FRM: 3.88%
  • Average origination charge: 0.53%
  • Median loan costs: 0.86%
  • Minimum FICO credit score: 660
  • Minimum down payment: 10%
  • Overall customer reviews score: 3.97 out of 5

If your credit score’s above 660 and a 10% down payment is not a problem, you may well decide to overlook SoFi’s customer satisfaction scores and add it to your shortlist. We would.

9. Movement Mortgage

Somebody had to come in at number nine, and it’s Movement Mortgage. But this is a review of the best online mortgage lenders. And nobody makes our list without having some seriously valuable qualities.

Movement Mortgage rates and requirements:

  • Median rate for 30-year FRM: 4.13%
  • Average origination charge: 0.79%
  • Median loan costs: 1.80%
  • Minimum FICO credit score: 620 (though 580 with compensating factors)
  • Minimum down payment: 3% [0% for VA and USDA loans]
  • Overall customer reviews score: 3.00 out of 5

Movement has a great range of loans and lower loan costs than, say, Rocket. We just wish it would work on its customer satisfaction and mortgage rates.

But don’t forget the rates we show are just a median. Ask for a quote to see if you’re in line for something better.

Compare mortgage rates today. Start here (Aug 6th, 2020)

How we chose the best online mortgage lenders

We made our picks of the best online lenders using the following criteria:

  • Rates and fees — Based on 2019 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 loan is personal. And you’re naturally going to care about some of those criteria more than others.

For example, if you have a stellar credit score, you wouldn’t mind that SoFi’s minimum score is 660.

Or, if you’re shopping for a USDA loan, it might not matter that NBKC has stellar rates, because it doesn’t offer the mortgage you need.

But everyone’s likely to be concerned about mortgage rates and fees. And most should pay attention to each lender’s customer service delivery.

So make sure you shop around with a few of the best mortgage lenders and find one that suits you.

Verify your new rate (Aug 6th, 2020)

What is an “online lender?” 

Lots of mortgage lenders let you apply online. But, with most, you soon end up dealing with loan officers who work within sometimes frustrating bureaucracies.

True online lenders have automated virtually the end-to-end process, certainly as far it’s visible to you.

So, with your permission, an online lender’s IT systems can reach out directly to your bank, the IRS, and other automated systems to verify your 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. Indeed, some lenders even let you e-sign your closing documents.

And that could see you complete the entire process without interacting with a single person — unless you choose to call a helpdesk.

You don’t have to be someone who hates humankind to prefer working in this way.

As we’ve grown used to managing our banking, insurance, payments, and domestic accounts online, many of us have discovered that the digital option is simply faster and easier.

But others may still prefer the in-person lending experience. And there are still plenty of lenders 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 rates
    • But not all. Public data reveal a difference of more than 0.50% between average rates for popular online lenders
    • So you still need to shop around for the best deal
  • Stats say they 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

>> Related: How to shop for a mortgage and compare mortgage rates

Drawbacks of online mortgage lenders

  • Online lenders tend to be better at “vanilla” mortgages than special ones
    • If your needs are out of the mainstream because you want a “non-qualified mortgage” (maybe your credit or income are a bit iffy, or you’re self-employed), 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
  • Not everyone on our list of the best online mortgage lenders offers the sort of mortgage you want or is comfortable dealing with the sort of borrower you are
    • Research your shortlist first so you apply only to those that meet your needs and are comfortable working with borrowers like you

>> Related: Why closing on a house is better in person

For most borrowers, online lenders can offer solid advantages in terms of rates, fees, convenience, and the time it takes to close.

Is that enough to swing you? Or do you prefer the human touch? Only you can decide.

Verify your new rate (Aug 6th, 2020)