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Best mortgage lenders: What the highest-rated lenders have in common

Hal Bundrick
Updated 4 min read

In the days of low mortgage rates, just about any mortgage lender would do. These days, when you're chasing even fractional interest rate breaks, it's more important than ever to find the best mortgage lender for your particular home-buying circumstance.

The best mortgage lenders will listen to your house-hunting dreams, research your home loan options, reduce fees to a minimum, and simply explain and guide the process — from mortgage preapproval to closing on the house.

And of the handful of lenders you'll talk to, one will rise above the rest: The one that excels at service and competes for your business with outstanding pricing.

Here's how to find the best mortgage lender.

Read more: How to buy a house in 2024

While most lenders follow the same eligibility requirements set by government-authorized providers or government agencies, there is one big difference between lenders: pricing. Each lender determines how much profit they build into their fees and mortgage interest rate. That's why it's so important to shop around with multiple lenders. Even a small difference in pricing can be magnified by the many years of mortgage payments you'll make.

Tip: Taking the time to compare loan offers can literally save you thousands of dollars.

Learn more: How to get the lowest mortgage rates

Your effort to find the best mortgage lender begins early in the home-buying process — before you start seriously shopping for a house.

You'll reach out to a lender to get an idea of where you stand. Perhaps confirm your home-buying qualifications with a second lender. Get a preapproval from one or the other. Then start house hunting.

After you have a contract on a home in hand, you'll expand your mortgage lender search, ask for loan offers, and narrow the field to a home loan lender that hits all the right notes.

Read more: First-time home buyer — What you need to know

Getting preapproved by a lender feels like a win. You're relieved that you qualify to buy a house and just want to start house hunting. And that's OK. Finding the right home is important. But so is making the right financial decision when it comes to that multi-year debt you're about to trigger.

When adding lenders to your roster of contenders, look for these five traits shared by the best mortgage lenders:

A preapproval is the ticket to shopping for a house. But it's only the first step. The lenders competing to win your business should have low-friction application procedures and easy document exchange, preferably with secure online paperwork capabilities.

Starting out, you may not know your best loan option. Is it a conventional loan or an FHA-backed loan? Maybe a jumbo? The lenders you talk to should be well-equipped to meet your funding needs with a variety of mortgage loan types.

Read more: Jumbo loans — How to buy a higher-priced house in 2024

The best mortgage lenders fairly price their loans without piling on a lot of expensive fees. There is a long list of potential loan charges to be aware of, but a mortgage origination fee can be as much as 0.50% to 1% or more of the loan cost. Look for lenders who waive lender origination fees.

The best lenders will show mortgage interest rates on a number of loan options and clearly disclose fees built into the interest rate. See "A big home-financing mistake to avoid" below.

Read more: Is now a good time to buy a house?

Are your questions answered quickly, and are you guided through the loan process along the way? The best mortgage lenders provide concierge-level service.

Your personal nominees for "best mortgage lender" to finance your house should come from different types of lenders: a bank, an online provider, or a local credit union, to name a few. Each will have their own strengths and weaknesses.

You will also want to consider lenders specializing in the type of loan you may be looking for (if you know) — that might include conventional loans, VA loans, lenders catering to first-time home buyers, FHA loans, refi, jumbo, or home equity products.

When shopping for multiple lenders, protect your credit score by submitting all loan applications within 45 days. FICO considers numerous credit inquiries for a single type of loan within a 45-day period to be related and won't compound the impact to your credit score.

Read more: Best mortgage lenders for first-time home buyers

Some lenders lower their mortgage rates by charging up-front fees called discount points. A big mistake is unwittingly choosing a lender with the "lowest rate" without realizing you're paying points to get that lower interest rate.

When comparing lenders, ask each to provide their finance rate with zero points.