Mortgage lender ranking 2020 and how to choose a lender
Are you looking for a lender? Start here
If you’re thinking about buying a new home or refinancing, you’re probably wondering which mortgage companies have the best options.
Thanks to the recent release JD Power 2020 Primary Mortgage Satisfaction Study in the United States, you will have a good starting point for your research.
With a mix of tech-focused lenders and major banks scoring the highest ratings, there are a variety of options to choose from.
But don’t limit your search. Just because a mortgage company gets great reviews doesn’t mean it’s the best business for you.
You should always compare the rates and fees of at least 3-5 lenders to make sure you get the best deal along with great customer service.
The highest rated mortgage lender for 2020 is …
At the top of JD Power’s list are some of the country’s mega lenders:
- Rocket mortgage
- Bank of America (tied for second)
- chase away (tied for second)
- American Bank
- loan deposit
Rocket Mortgage by Quicken Loans earned JD Power’s top rating for the 11th consecutive year.
Rocket and its parent company Quicken receive high marks from borrowers for their quick and easy online application and customizable loan features.
In addition to being a leading lender for FHA and VA loans, Rocket mortgage says he can provide a pre-approval decision in eight minutes.
But Rocket and Quicken’s winning track record doesn’t mean they’re the best mortgage lender for everyone.
To find the right mortgage lender for you, you need to do some homework.
Start by determining the type of loan you need. Then compare the rates and fees of a few different lenders that look promising.
You might be surprised to know which one can give you the best deal.
Don’t Miss The Best Mortgage Lenders For Veterans And Military
JD Power’s list primarily includes lenders who work with a wide range of consumers.
But if you look at the fine print, you can see that military service members and veterans have additional options.
In fact, the best military lenders consistently rank even higher than Quicken Loans for customer satisfaction. Only they do not appear at the top of the list because they are not available to most borrowers.
This year’s highest rated military and veteran mortgage lenders are:
These lenders specialize in VA loans, which allow zero down payment and often have lower than market interest rates for eligible members.
Finding a veterans-focused lender can also be a good idea if you have a difficult credit history or higher debt, and want to work with a lender who can offer you additional advice or assistance for help you qualify for a mortgage.
Many (but not all) military lenders have special programs to help VA eligible borrowers become homeowners.
If you are considering applying for a VA loan, you can compare the best VA lenders and ask for quotes from several to see who offers the most competitive rates and conditions.
How to choose a mortgage lender
When thinking about how to find a mortgage lender, appraisals can be a great place to start. If millions of other homeowners are singing the praises of a lender, it’s probably worth checking out.
But rankings are just that – a starting point.
The right lender for you might not be one of the national banks or even be on a list of the best.
You might be better off looking to local banks or credit unions that are active throughout the lending process or will work with you to help you qualify for a mortgage.
This is especially true if you think you’ll have a hard time qualifying for a home loan, perhaps because you have a lower credit rating, high debt, or non-traditional income.
Either way, finding a lender who knows how to work with borrowers like you and who can offer low rates for your situation is crucial.
Think about your unique needs
There are a number of factors that determine whether a lender will approve you for a loan.
Sometimes a small business has more bandwidth to help borrowers with low credit scores or limited credit histories.
Lenders may also specialize in a particular type of loan or work primarily with a certain type of borrower.
- Some are known to make jumbo mortgages, which exceed the loan amount guaranteed by the government
- Others work with bad credit or independent borrowers who may have difficulty qualifying for a regular loan
- Still others make a large number of FHA, VA or USDA loans and may offer expertise in these areas.
What is your borrower profile?
Understanding what your profile as a borrower looks like can help you choose the right lender for your situation.
Here are some of the top factors mortgage lenders look at:
- Credit score: The higher your score, the more home loan options you will have. However, some loan programs accept credit scores between 500 and 600, and your rating is only part of the assessment process.
- Debts: Lenders calculate all of your other debt as well as your potential mortgage payment against your monthly income (this is called your debt-to-income ratio) to determine how much you can afford.
- Returned: Your income can also affect the types of loan programs you qualify for. USDA loans, for example, cap income at 15% above the local median. Income can also determine whether you qualify for down payment assistance programs, and not all lenders allow borrowers to use them for their loans
- Advance payment: If you can save 20% or more, you can avoid paying private mortgage insurance (PMI). But many lenders offer loans with as little as 3% down. FHA loans only require 3.5%, and VA and USDA loans allow a 0% drop
Before asking for quotes from lenders, make a short list of mortgage companies that you think are right for you. Then find out if they offer the type of loan you are looking for.
Many lenders will list the loan products they offer on their websites, and some will highlight special programs for first-time borrowers or poor credit applicants.
If you are still unsure which lenders are the best, you can ask your real estate agent for recommendations.
You may also consider hiring a mortgage broker. A broker identifies the loans that are right for your situation, as well as the lenders who offer these products.
How to Compare Mortgage Rates and Fees
It’s a good idea to get mortgage quotes from multiple lenders so you can compare them side by side.
While interest rates are a factor in your decision, there are a number of other aspects to consider, including:
- Closing costs: How much can you expect to pay in fees, reviews, setup fees, and other expenses?
- Loan products: Do they offer mortgage options that are what you are looking for and what you can afford in terms of down payment?
- Maintenance: Does the lender manage your loan after it closes – which means they take care of account management and payments – or sell it to another company?
- Special programs: Does the lender allow down payment assistance or offer loans designed to help first-time home buyers?
- Application process: Is the application process 100% online or do you work with a loan officer from approval to close?
As you get a feel for how different mortgage companies interact with borrowers, as well as the terms and products they offer, it will become easier to identify the best-suited lender. to your needs.
Return to the mortgage market 2020
Historically low interest rates have pushed home sales to a 14-year high this year, and refinances are up 200%.
Many homeowners and buyers rushed to lock in rates at 3% or less during their term, which turned out to be a smart move as rates rose after President-elect Joe Biden won.
However, the Federal Reserve has said rates will stay low until 2023. So you can still get a good interest rate if you haven’t bought or refinanced yet.
Low rates have caused snags in the mortgage lending process
Despite skyrocketing sales, the mortgage industry has had its fair share of problems in 2020.
JD Power reported that the surge in mortgage demand has resulted in increased loan processing times, as well as issues with self-service application options.
The organization also noted that lenders were struggling to cope with the influx of inquiries and the increase in ongoing borrower inquiries, especially with so many employees forced to work from home.
What to expect from mortgage lenders in 2021
Lenders will likely try to correct the situation in 2021 in order to stay competitive, according to JD Power.
If you are worried about having problems with online application programs, or if you hope to move forward quickly with your loan application, contact the lenders you are considering and ask them what their turnaround times are for loan decisions.
You can also ask for their average loan closing time, as well as their customer support options for their online tools.
Getting a feel for how they handle potential issues can help you feel more confident when selecting a lender.
The information contained on The Mortgage Reports website is provided for informational purposes only and does not constitute an advertisement for any products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, its parent company or its affiliates.