Best online mortgage lenders in 2024
Written by
Edited by
The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for .
An online mortgage lender is one that operates exclusively online, without branch locations or only some satellite offices. To assemble our list of the best online lenders, we’ve reviewed over 80 lenders for affordability, availability and borrower experience. Here are our top picks for 2024.
Bankrate’s picks for best online mortgage lenders
| Online mortgage lender | Bankrate Score | Minimum credit score | Minimum down payment |
|---|---|---|---|
| First Mortgage Direct | 4.8 | 620 for conventional loans, 580 for FHA loans, 580 for VA loans | 3% for conventional loans, 3.5% for FHA loans, none for VA loans and USDA loans |
| SoFi | 4.6 | 620 for conventional loans, 600 for FHA loans, 600 for VA loans | 3%-5% for conventional loans, 3.5% for FHA loans, none for VA loans |
| Rocket Mortgage | 4.6 | 620 for conventional loans, 680 for jumbo loans, 580 for FHA loans, 580 for VA loans | 3% for conventional loans, 10%-15% for jumbo loans, 3.5% for FHA loans, none for VA loans |
| Mr. Cooper | 4.6 | 620 for conventional loans, 580 for FHA loans, 600 for VA loans | 3% for conventional loans, 3.5% for FHA loans, none for VA loans |
| Better | 4.6 | 620 for conventional loans, 580 for FHA loans | 3% for conventional loans, 3.5% for FHA loans, none for VA loans |
| Alliant Credit Union | 4.5 | Undisclosed | 5% for conventional loans |
| Homefinity | 4.5 | 620 for conventional loans, 600 or higher for FHA loans and VA loans (can be lower in some cases) | 3% for conventional loans, 3.5% for FHA loans, none for VA loans or USDA loans |
| Tomo | 4.5 | 620 for conventional loans | 3% for conventional loans, 3.5% for FHA loans, none for VA loans |
First Mortgage Direct
-
First Mortgage Direct has competitive rates, and unlike other lenders, it doesn’t charge an origination fee. Combine this with its nationwide availability and its wide variety of loan offerings, and you can see why it’s our top pick for an online mortgage lender in 2024.
SoFi
-
SoFi is a great option for an online mortgage lender, especially if you’re already a SoFi member — which can land you a special discount. They’re also quick, allowing you to prequalify in minutes.
Rocket Mortgage
-
As the nation’s largest mortgage lender and a pioneer of online lending, Rocket gets high scores for its borrower experience and availability.
Mr. Cooper
-
Mr. Cooper has a great online experience with rates that consistently rank below Bankrate averages. Plus, it offers a wide range of mortgage products with availability throughout the U.S., Puerto Rico and the U.S. Virgin Islands.
Better
-
Better offers conventional, FHA and VA loans nationwide with no origination, application, processing or underwriting fees. They’re also known for their speed, with their “One Day Mortgage” process, which promises an underwriting decision in 24 hours.
Alliant Credit Union
-
For members, Alliant offers the adjustable-rate Alliant Advantage Mortgage, which requires no down payment or mortgage insurance, and comes with a loan limit of $500,000. Couple that with less fees than average and listing actual rates on its site, and you can see why Alliant makes the list of the best online mortgage lenders in 2024.
Homefinity
-
Homefinity (a subsidiary of Fairway Independent Mortgage) provides speedy, convenient service across most of the nation. With their online focus, you have access to up-to-the-minute rate information and a bevy of calculators. Plus, they offer a wide range of mortgage products, including special financing for medical professionals.
Tomo
-
Up-and-coming Tomo is a small online lender whose focus on borrower experience has garnered it many positive reviews. While it’s not available everywhere, and it doesn’t offer refinances, borrowers can find plenty of information on its site, including a handy rate estimation tool.
-
How we chose the best online mortgage lenders: To determine the best online mortgage lenders, Bankrate evaluated more than 80 lenders for factors relating to affordability, availability and borrower experience, assigning each a Bankrate Score out of five stars. Based on this methodology, the best online mortgage lenders in 2024 generally have a Bankrate Score of 4.3 stars or higher. Note: The Bankrate Score considers a mortgage lender’s products and services only; it is not a reflection of a lender’s internal operations or practices.
How to find the best online mortgage lender for you
Getting financing for a home is a process, so many borrowers are attracted to online mortgage lenders simply for their convenience, efficiency and speed. These are important factors to consider when looking for the best online mortgage lender, but it’s also crucial to compare costs for your individual situation, and take the time to read mortgage lender reviews to learn what to expect from the online experience. When comparing digital lenders, look for:
- The kinds of loans they offer
- Credit and down payment requirements
- Application and origination fees
- Rate-lock and other perks
- What support options are available
Does an online mortgage lender have lower rates?
Online lenders can have lower rates than their brick-and-mortar competition because they have less overhead. However, that doesn’t necessarily mean you’ll get a lower annual percentage rate (or APR) — the cost of the interest rate plus fees. The rate you’re offered often has more to do with your credit and financial profile and prevailing market trends. It can pay off to shop around with at least three different mortgage lenders.
Pros and cons of online mortgage lenders
There are several benefits to getting an online mortgage, including:
- Lower mortgage rates and fees due to low overhead
- Online preapproval or prequalification, often in minutes, and shorter timelines for underwriting and closing overall
- Real-time status updates
However, they also come with downsides, like:
- Can’t always connect with a human for questions or support
- Might not be able to learn what rates you qualify for without getting preapproved
- Potentially greater odds of a security breach, identity theft or fraud
Next steps to apply for an online mortgage
- Step 1: Strengthen your credit score – Before applying for a loan, take a hard look at your credit history and work to improve your score by paying down outstanding balances. Also, resist taking on any more debt and/or applying for any other loans or lines of credit.
- Step 2: Set a budget – It’s important to understand how much house you can afford before you go shopping. Note that you may be preapproved for more money than what you can comfortably afford.
- Step 3: Understand your mortgage options – There are a few different types of mortgages. Know what they are and which one you want.
- Step 4: Compare several lenders – Rate-shop with at least three different lenders to get the best deal on rates, fees and terms.
- Step 5: Get preapproved for a mortgage – Apply for mortgage preapproval with several lenders to compare offers and get accurate loan pricing for your specific situation. Preapproval shows sellers that you’re a serious shopper and that you have the financial backing to bid on a home.
Online mortgage FAQs
-
An online mortgage is a home loan originated by a lender based either entirely on the web, with a digital end-to-end experience from application to closing, or a brick-and-mortar company with in-person locations and online services. While several big banks have built out their capabilities to include a digital mortgage platform, many mortgages are also being originated by non-bank institutions, like LoanDepot and Rocket Mortgage.
-
With an online mortgage, all or many of the steps in the lending process can be completed electronically, whether through an app or online portal. These steps might include: preapproval or prequalification; application and document upload; loan processing and underwriting; and closing (sometimes called an e-closing). By streamlining these steps — and, in the case of a digital lender, having no offices and overhead — online mortgages tend to have lower rates and overall costs.
-
Generally, yes. You can get an FHA loan through many online lenders with a minimum credit score of 580 and 3.5 percent down, or a credit score as low as 500 if you put 10 percent down. Most conventional loans with online lenders require a minimum credit score of 620.
-
To determine the best online mortgage lenders, Bankrate periodically evaluates more than 80 lenders for factors relating to affordability, availability and borrower experience, assigning each a Bankrate Score out of five stars. The best online mortgage lenders generally have a Bankrate Score of 4.5 stars or higher. Learn more about our methodology.
Related Articles
