The Best Mortgage Lenders of 2024

Financing a home purchase makes it more feasible for people to have the ability to buy a house. The best mortgage lenders can help borrowers find the right loan to fit their financial situation.

Best Overall

The Best Mortgage Lenders Option: PNC


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The Best Mortgage Lenders Option: Caliber Home Loans

Caliber Home Loans

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Best Online Experience

The Best Mortgage Lenders Option: Guaranteed Rate

Guaranteed Rate

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Buying a house is a huge financial decision that often involves hundreds of thousands of dollars. Many people would not be able to afford homeownership without the assistance of mortgage lenders. By financing home purchases through mortgages, lenders pave the way for people from all walks of life to realize their dreams of owning a home.

Mortgage companies can offer a wide range of home loans, from conventional fixed-rate mortgages to government-backed loans, to meet the needs of home buyers with different financial situations. The best mortgage lenders may work with borrowers to find the right loan product to suit their circumstances, even those who have subpar credit scores or irregular income streams.

It may be tempting to settle on the mortgage company offering the lowest interest rates, but finding the best mortgage lender for each situation requires much more research than simply looking at cost alone. By reviewing their options from every possible angle, borrowers can glean a more complete understanding of what each company brings to the table and which ones will provides the combination of benefits that matter most for their particular circumstances.

  2. RUNNER-UP: Caliber Home Loans
  3. BEST ONLINE EXPERIENCE: Guaranteed Rate
  6. BEST FOR VA LOANS: Veterans United
  7. ALSO CONSIDER: Better
The Best Mortgage Lenders Options

What to Consider When Choosing One of the Best Mortgage Lenders

Mortgage companies can vary significantly—even the best mortgage lenders may offer different types of loans and financing terms for customers to consider. Cost factors, including mortgage rates and annual percentage rates (APR), will likely change from lender to lender. In addition, each company will have its own eligibility standards that potential borrowers need to meet to qualify for a loan. Experiential factors, such as application processes, closing timelines, and underwriting processes, can all be different depending on the lender.

Eligibility Requirements

While certain mortgage products have uniform baseline requirements that borrowers need to meet to qualify—FHA loans, for instance—lenders will also maintain their own eligibility standards for borrowers. These requirements are in place to minimize financial risk for the lender and reduce the chances of a mortgage default.

Eligibility requirements are not published and will likely be determined on a case-by-case basis, but some common factors include the size of the down payment, the borrower’s debt-to-income (DTI) ratio, their credit score, their monthly income, and other financial considerations. These eligibility requirements determine what kinds of home loans a borrower qualifies for, the size of the loan they can get, and the interest rate attached to the loan. Because each lender has its own requirements, home buyers may qualify for certain loan terms with one mortgage company, but not another.

Application Process

Applying for a mortgage can seem daunting for first-time home buyers and experienced homeowners alike—both due to the amount of paperwork required and the level of scrutiny involved. Some lenders will attempt to make the application process easier for borrowers by allowing them to apply online or through a mobile app, submitting digital copies of required documents and signing documents electronically without ever meeting face to face with a loan officer. On the other hand, some home buyers may prefer to meet with a loan officer in person—or at least speak with them over the phone—when applying for a mortgage, and so they may want to look for a mortgage company that can meet those needs.

Another factor to consider is the lock-in period on the mortgage rate. When a mortgage is approved, borrowers may have the option to lock in their interest rate so it doesn’t change between loan approval and closing. Mortgage rates can fluctuate quite a bit from day to day, and sometimes even from hour to hour, so the ability to pounce on low rates before they potentially increase could be very appealing. Lenders may lock in rates for different periods of time, but the Consumer Financial Protection Bureau notes that 30, 45, and 60-day rate lock periods are typical.

Prequalification Process

Before home buyers start looking at listings and attending open houses, it’s a good idea to know how much home they can afford. Because financing is key to buying a house, house hunters may want to check the loan amount they qualify for with a particular lender. While getting prequalified does not necessarily mean that the borrower will eventually be approved for a home loan, mortgage prequalification does provide people with an estimated loan amount they could potentially qualify for so they can narrow their house search to properties within their expected budget.

Mortgage prequalification is usually a quick process—in some cases, lenders can return the results in just a few minutes—and can sometimes be completed entirely online. However, some lenders may require borrowers to call a loan officer directly to get prequalified, which may appeal to people who prefer a more hands-on approach. For home buyers who want the results of their prequalification as soon as possible, though, this could also seem inconvenient.

Loan Types

Mortgage lenders don’t always offer the same types of loans—in fact, borrowers should expect the availability of certain home loans to vary across companies. That being said, some mortgage types are very common and should be widely available—most notably, conventional fixed-rate mortgages. Adjustable-rate mortgage (ARM) options are relatively common as well. These mortgages function a bit differently, with a set fixed-rate period at the outset of the loan term—often 5 or 7 years, but sometimes longer or shorter. After that fixed-rate period ends, the interest rate readjusts at set intervals according to prevailing market conditions and rate trends.

Home buyers may also be interested in government-backed loans such as VA mortgages and FHA loans, which can offer incentives like flexible down payment and credit score requirements. Jumbo loans and interest-only loans may be available as well, providing financing options for people who want financing and payment terms that wouldn’t typically be offered with conventional mortgages. There are financing options for current homeowners to explore, too: Home equity loans and home equity lines of credit (HELOC) convert existing home equity into money that borrowers can spend to pay for larger expenses, such as a home remodel or even tuition costs or medical bills. The best mortgage loans will depend on each person’s circumstances and what they prioritize most with their financing options.

Loan Terms

Loan terms often refer to the length of the loan and its repayment period. Fixed-rate loans are often available with 15-year or 30-year amortization schedules, for instance, but some lenders may offer other loan terms to consider such as 10- or 20-year fixed-rate loans.

Loan terms on ARMs may be a bit confusing, as loan terms are split into the fixed-rate period and adjustable rate period. A 7/1 ARM means the fixed-rate period runs for the first 7 years with rates readjusting every year after that until the loan is repaid. Meanwhile, a 5/6 ARM has a 5-year fixed-rate period, but the interest rate will adjust every 6 months rather than every year. In both cases, the total length of the loan will likely run 30 years, unless other terms are given by the lender.

Closing Time Frame

When it comes time to secure a mortgage, time is often of the essence. Borrowers need to get their financing in order before their closing date, and a protracted closing time frame could create unnecessary delays. In other cases, home buyers may actually prefer a longer closing window because they need time to satisfy certain contingencies—such as selling their current home so they can use those proceeds on the purchase of their new house.

Lenders may stick to different closing time frames, although 30 to 45 days is the typical length of time needed to close on a house. This window gives the homeowner and the lender time to schedule home inspections, appraisals, title searches, and other necessary steps in the mortgage process. Borrowers who are in a hurry to close may want to consider mortgage lenders with quicker closing times.

Mortgage Rate

The interest rate on a mortgage is one of the most important factors determining the cost of a home loan. Higher mortgage rates mean borrowers will owe more interest on their loans, which leads to higher monthly mortgage payments. Lenders set their mortgage rates according to a variety of factors, including security bond movement, inflation, the federal funds rate, and general economic conditions.

When searching for the best lender for home loans, home buyers may find that published mortgage rates vary quite a bit from lender to lender, as each company will make its own calculations on the ideal rate to set at any given time. Mortgage rates also fluctuate depending on the type and length of loan. Borrowers will likely receive a lower interest rate on a 15-year mortgage compared with a 30-year mortgage, for instance. ARMs may offer lower interest rates than fixed-rate loans during their initial fixed-rate periods, but rates could go up or down once the adjustment period begins.

The borrower’s own qualifications influence rates as well, with credit scores, debt, down payment amounts, and loan-to-value (LTV) ratios all impacting the mortgage rates offered to a prospective borrower. It’s worth considering reaching out to a few lenders to see what rate a person may qualify for given their financial situation.

Annual Percentage Rate

Some home buyers may focus on mortgage rates when figuring out what their home loan will cost, but annual percentage rate (APR) may be a more accurate representation of the total cost to take out a loan. The APR takes into account all costs related to the borrower’s mortgage, including interest, but also origination fees, closing costs, mortgage point costs, and any private mortgage insurance (PMI) that may be required.

Looking at the APR can help home buyers see the true cost of their mortgage. For instance, loans with PMI may have higher APRs than loans with higher interest rates due to the additional costs. Because the different costs that may come with a mortgage can vary so much across lenders, APRs can change quite a bit from company to company.

Mortgage Points

If a borrower is dissatisfied with the interest rate they are offered, they may have the opportunity to purchase mortgage points (or discount points) to lower the rate. Buying down the rate in this fashion could save money down the road because homeowners will owe less interest on their mortgage over the long run. Not all lenders offer mortgage points, though, so if this is an option that a home buyer is interested in using, they may need to shop around to find a mortgage company that will allow them to buy down the rate.


Many of the top home mortgage lenders manage in-house underwriting teams to review the qualifications of borrowers and decide if the lender should go forward with a loan. That’s not the case for all lenders, however, and some may outsource their underwriting processes to third parties. Mortgage companies that have their own internal underwriting departments may run more efficiently with fewer miscommunications, processing errors, and delays. They may also be more communicative with borrowers, especially if additional documentation is required on a loan application.

Until underwriters sign off on a mortgage, the loan—and by extension, the home purchase—cannot move forward to the closing table. An in-house underwriting team may be better equipped to streamline this process, avoid costly delays, and close on a loan without incident.

Our Top Picks

The best mortgage lenders may offer a wider range of loan options, varied loan terms, flexible financing options, and user-friendly application processes. Borrowers may find that their preferred lender offers the right combination of benefits to fit their needs.

Best Overall


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  • Application process: Online, phone, agent
  • Prequalification process: Phone, agent
  • Loan types: Fixed rate, ARM, VA, FHA, HELOC, USDA, jumbo
  • Loan terms: 10, 15, 20, or 30 years on fixed-rate loans; 7 or 10 years on ARMs
  • Closing time frame: 30 to 45 days
  • NMLS Unique Identifier: 446303


  • USDA loan options available
  • HELOC options available
  • Wide range of 10- to 30-year fixed-rate loan terms
  • Relatively low mortgage rates and APR


  • Online prequalification unavailable

Why It Made the Cut: PNC offers numerous types of home loans, along with different loan term options to choose from when selecting a fixed-rate mortgage. Home buyers may also find that PNC offers competitive mortgage rates to help keep loan costs down. PNC holds a prominent position in the broader financial services industry, so it may come as no surprise that the company’s home loan offerings are just as strong. Although PNC customers will need to speak to a loan officer to get prequalified for a loan, there are numerous financing options to consider, including HELOCs for current homeowners who want to take advantage of their accumulated home equity. PNC also offers USDA loans, which are less common than other types of government-backed loans, helping people in rural communities secure financing for a home purchase. The loan terms on fixed-rate mortgages are extensive too, as the lender offers terms of 10, 15, 20, or 30 years for this type of financing. Having more options to choose from can help borrowers balance the length of their loan with the total cost they want to pay for the mortgage. Depending on their qualifications, prospective borrowers may also find that PNC offers relatively low interest rates and APRs on home loans—which would mean lower monthly mortgage payments.


Caliber Home Loans

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  • Application process: Online, phone, agent
  • Prequalification process: Phone, agent
  • Loan types: Fixed rate, ARM, VA, FHA, USDA, jumbo, interest-only
  • Loan terms: 10 to 30 years on fixed-rate loans; 3, 5, 7, or 10 years on ARMs
  • Closing time frame: 10 business days or more
  • NMLS Unique Identifier: 15622


  • USDA loan options available
  • Wide range of 3- to 30-year loan terms and options available
  • Flexible financing options for self-employed borrowers
  • Fast mortgage closing in 10 or more business days


  • Prequalification unavailable online

Why It Made the Cut: Borrowers looking for flexibility and speed in a mortgage lender may be interested in Caliber Home Loans and its various financing options, wide range of loan terms, and quick closing time frames. Caliber Home Loans offers a great deal of flexibility across its mortgage products, giving borrowers plenty of options to consider. For instance, home buyers may qualify for 3-, 5-, 7-, or 10-year ARMs, which provide loan terms that adjust at set intervals to fit different borrowers’needs. The company also offers USDA loans for home buyers who live in rural areas and are unable to meet conventional loan requirements.

Self-employed borrowers may be interested in Caliber’s SmartSelf program, which accounts for irregular income streams when the lender is determining eligibility requirements. This program can also facilitate various types of loans, including jumbo loans, interest-only loans, and ARMs, so borrowers can find the right option for their financing needs. Prospective borrowers will not be able to get prequalified online—instead, they will need to speak to a loan officer—but they may find that Caliber can close their mortgage in a quick time frame. The company claims that some borrowers will be able to close their loans within 10 business days of submitting a loan application.

Best Online Experience

Guaranteed Rate

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  • Application process: Online, phone, agent, app
  • Prequalification process: Online, phone, agent
  • Loan types: Fixed rate, ARM, VA, FHA, HELOC, jumbo, interest-only
  • Loan terms: 15 or 30 years on fixed-rate loans; 5, 7, or 10 years on ARMs
  • Closing time frame: 30 to 45 days
  • NMLS Unique Identifier: 2611


  • Fixed-rate HELOC option available
  • User-friendly website and online mortgage tools
  • Convenient mortgage management via mobile app
  • Informative and insightful housing market research


  • Relatively high mortgage rates and APR
  • Somewhat misleading mortgage rate calculator

Why It Made the Cut: Guaranteed Rate’s wealth of helpful online tools, unique market research, and user-friendly mobile app make it a solid choice for home buyers who value a seamless digital experience. Guaranteed Rate provides a user-friendly online and digital experience that extends across the entire mortgage process. Home buyers who are just starting out looking for a home loan may find the company’s various mortgage tools, including rate and affordability calculators, very helpful. It’s worth noting that the company’s mortgage rate calculator includes purchased mortgage points, so results may return a lower interest rate than borrowers should expect to receive. That being said, these tools and calculators are easy to find and use on the site, so home buyers can research their financing and purchase options with relative ease.

The company’s housing market research is another asset for borrowers, providing insights into housing market trends for different ZIP codes so home buyers can better focus their search. Although mortgage rates and APRs can be relatively high, they may still fall below the industry averages published by Freddie Mac, a government-sponsored enterprise that buys mortgage-backed securities on the secondary market. Borrowers can manage their loans through the company’s dedicated mobile app, which allows users to check their monthly payments, review loan terms, and contact their assigned loan officer. Another feature that may be appealing to borrowers is Guaranteed Rate’s HELOC options, which offer fixed interest rates as well as quicker funding times than standard HELOCs.

Best Application Process

Rocket Mortgage

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  • Application process: Online, phone, app
  • Prequalification process: Online, phone
  • Loan types: Fixed rate, ARM, VA, FHA, jumbo
  • Loan terms: 15 or 30 years on fixed-rate loans; 7 or 10 years on ARMs
  • Closing time frame: 30 to 45 days
  • NMLS Unique Identifier: 3030


  • Quick 2-minute online prequalification
  • Lengthy 90-day rate-lock period
  • Convenient mortgage management via mobile app
  • Responsive online chat staffed by live agents


  • Somewhat limited ARM options
  • Somewhat misleading mortgage rate calculator

Why It Made the Cut: Borrowers who choose Rocket Mortgage as their lender may be able to take advantage of a quick loan prequalification time frame, live chat support, convenient mortgage mobile app, and the ability to lock in their rate 90 days in advance of their closing date. Rocket Mortgage is attuned to the role that time plays in the mortgage process, offering features that can help borrowers plan ahead and manage their time. For instance, borrowers may be able to get prequalified for a home loan in as little as 2 minutes, allowing them to quickly see what kind of financing they might qualify for with a mortgage. The company’s rate calculator does include mortgage points by default, which could affect interest rate and APR estimates, but Rocket Mortgage offers an excellent digital experience in other ways.

In particular, the dedicated mobile app enables borrowers to conveniently manage their mortgage at any time. Customers can schedule a payment, set up auto pay, view mortgage documents, and apply for a refinance—all through the app. Borrowers looking for specific ARM terms may find Rocket’s 7- and 10-year ARM options somewhat limiting, but live agents can help them review potential financing options through the website’s chat feature. Rocket Mortgage also stands out thanks to its 90-day rate-lock period, which is significantly longer than most lenders typically offer. Locking in their rate so far in advance of their closing date could protect borrowers from volatile mortgage rate conditions and potentially secure a lower interest rate.

Best Discounts


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  • Application process: Online
  • Prequalification process: Online
  • Loan types: Fixed rate, jumbo
  • Loan terms: 10, 15, 20, or 30 years on fixed-rate loans
  • Closing time frame: Not listed
  • NMLS Unique Identifier: 1484615


  • Low 3 percent down payment option for first-time home buyers
  • $2,000 rebate on lender-caused mortgage delays
  • Up to $9,500 rebate on real estate agent commission


  • Limited mortgage options
  • Account enrollment required to view mortgage rates

Why It Made the Cut: With low down payment options and generous rebate opportunities, SoFi could be a great option for first-time home buyers who are looking for discounts on their mortgage. SoFi offers a number of rebates, discounts, and financing options that could appeal to borrowers who want to reduce the total cost of their home loan. For instance, the company has partnered with HomeStory, a real estate services provider, to offer cashback rewards up to $9,500 to borrowers who find and use the services of a real estate agent through that network. Home buyers may want to note that SoFi does not offer government-backed loans or ARMs, but first-time buyers may be able to secure financing with a down payment as low as 3 percent. Such flexible financing options could make it easier for first-time buyers to afford a house even if they have not been able to save up a large sum of money to put toward a sizable down payment.

Prospective customers will need to set up an online account and provide some information about themselves and the property they are considering purchasing to view current mortgage rates. Since this approach requires more criteria, it’s likely to lead to more accurate rate estimates. In addition, if the lender causes a delay when processing their mortgage, such as losing paperwork, neglecting to schedule an appraisal, or submitting the wrong information to a title company, borrowers could receive a $2,000 rebate.

Best for VA Loans

Veterans United

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  • Application process: Online, phone
  • Prequalification process: Online, phone
  • Loan types: VA loans
  • Loan terms: 15 or 30 years on VA loans
  • Closing time frame: 30 to 45 days
  • NMLS Unique Identifier: 1907


  • Specialty in VA home loans
  • Extensive and informative online VA home buying course
  • Free credit consulting services


  • Financing unavailable for civilian home buyers

Why It Made the Cut: Veterans United specializes in VA loans, focusing on financing for service members and offering a variety of online resources and support services to help them buy a home. Veterans United’s mission is to help service members and their families afford homeownership through government-backed financing. In fact, the company focuses specifically on VA home loans and mortgage refinancing, so borrowers can feel confident that loan officers, underwriters, and other mortgage professionals working on their loan understand VA lending requirements and can help make the entire loan process run smoothly. This specialty also means that Veterans United does not directly offer mortgages to civilian home buyers, but the company does have a partnership with the mortgage lender Paddio to facilitate conventional financing.

Before deciding to apply for a loan, eligible service members may benefit from the company’s extensive online VA home buying course, which educates prospective customers on the entire home buying process and helps them decide if they are ready to shoulder the financial responsibility of homeownership. Veterans United also offers free credit consulting to service members who do not currently qualify for a VA loan due to low credit scores, high DTI ratios, or other financial concerns. With this assistance, service members who are ineligible to qualify for a loan may be able to improve their qualifications as a borrower so they can secure financing later down the line.s

Also Consider


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  • Application process: Online
  • Prequalification process: Online
  • Loan types: Fixed rate, ARM, FHA, jumbo
  • Loan terms: 10, 15, or 30 years on fixed-rate loans; 5, 7, or 10 years on ARMs
  • Closing time frame: 3 to 6 weeks
  • NMLS Unique Identifier: 330511


  • No lender fees required
  • $2,000 rebate on lender-caused mortgage delays
  • 24/7 customer support over the phone


  • Relatively high mortgage rates and APR
  • Relatively long 3-to-6 week closing time frame

Why It Made the Cut: With potential rebate options and zero lending fees, Better could be a good option for home buyers looking to lower the up-front costs of getting a mortgage. Better offers different ways for home buyers to reduce the initial expenses that come with taking out a home loan. The company does not charge origination, application, or underwriting fees, as is common practice for other lenders, so borrowers may not owe as much money when going through the application and closing processes. On the other hand, customers may find that Better has relatively high mortgage rates, but exact rates will depend on the borrower’s qualifications and financial circumstances. For some home buyers, the prospect of paying less up front may be worth the trade-off.

Home buyers may stand to benefit from Better’s Closing Guarantee, which promises to give borrowers a $2,000 rebate if a lender-caused error leads to a delay in closing. Customers may appreciate the sense of security this policy offers since they could receive money back if the loan process drags on too long. It’s worth noting that the company’s closing time frame covers a wide range—3 to 6 weeks—so mortgages could take longer to close in some cases. Borrowers with questions or concerns about their loan can always reach out to Better’s customer support line, which is available at any time to help provide answers and address issues.

Our Verdict

Our vote for Best Overall goes to PNC because of its wide range of loan options to choose from, including both USDA loans and HELOCs, and potentially low mortgage rates. We selected Caliber Home Loans as our Runner-Up pick because of its flexible financing options, quick closing time frame, and varied loan terms.

How We Chose the Best Mortgage Lenders

When searching for the best mortgage lenders, there are many potential considerations to take into account. Cost factors, such as mortgage rates, lender fees, discounts, and rebates, are all important criteria to weigh when looking at potential lenders. Factors that impact a home buyer’s eligibility, such as credit score, DTI, or down payment requirements, were considered as well. We also looked at the availability of loan options, including both the type of mortgages offered and the financing terms attached to those loans.

It’s also important to consider lender practices that could impact the borrower experience at every stage of the home buying journey. In that regard, prequalification and application processes as well as closing time frames were reviewed during the course of our research.

Before You Choose One of the Best Mortgage Lenders

Before getting a home loan with one of the best mortgage lenders, home buyers will want to determine whether they can afford to own a home. When choosing a mortgage lender, it can be helpful to take stock of all existing financial obligations, including recurring debt, to create a realistic monthly budget and see where a monthly mortgage payment may fit.

Home buyers may also want to think about their qualifications as a borrower. Excessive debt, low credit scores, or irregular income could raise red flags with lenders, and the loan application could be denied. In some cases, prospective borrowers may wish to spend time improving their financial situation to bolster their borrower credentials and qualify for more favorable financing terms before considering a home purchase.

Cost of Opting for One of the Best Mortgage Lenders

There are a number of expenses that come with buying a home, including the initial down payment, closing costs, and monthly mortgage payments. Smaller fees may be owed during the application and underwriting processes as well. Borrowers could be required to pay for a home inspection and an appraisal, in addition to a loan origination fee, and other miscellaneous expenses related to the loan. When closing day comes around, buyers may need to cover the cost of title fees, attorney fees (if your state requires an attorney to be present at closing), and recording fees as well.

In addition to the principal and interest on the loan, borrowers will also need to pay homeowners insurance premiums and property taxes, which will increase those monthly payments. Buyers who are unable to put forward a 20 percent down payment on their new home may be required to pay private mortgage insurance, which will add to the total cost of their home loan. Borrowers considering an FHA loan with one of the top home loan lenders should know that mortgage insurance for this type of loan can never be removed regardless of how much equity they accumulate in the property.

The Advantages of Opting for One of the Best Mortgage Lenders

For many people, buying a house would be impossible without the financing provided by mortgage lenders. The long loan terms and comparatively low interest rates typically included with mortgages allow borrowers to break up their loans into manageable monthly payments and steadily repay the loan amount over a period of time. The best mortgage companies offer many benefits to streamline and improve the entire loan process, helping borrowers close on a new home:

  • Wide variety of loan options to fit different budgets, financial situations, and amortization schedules.
  • Quick online prequalification (in some cases) and application processes so borrowers can start their home search without delay.
  • Digital tools such as mortgage calculators, online courses, and mobile apps to help home buyers at every stage of the mortgage process.


Mortgages are complex financial vehicles and can be very confusing to any home buyer. Just knowing where to start looking for a mortgage can seem daunting at times. Answering some of the most common questions home buyers have about home loans can clear up some of the confusion surrounding mortgages so they can find the best mortgage lender for their circumstances.

Q. What is private mortgage insurance (PMI)?

Private mortgage insurance—or PMI—protects lenders in case the borrower defaults on their home loan. Lenders will typically attach PMI to conventional mortgages when borrowers put less than 20 percent forward for their down payment. Insurance premiums will be included in the monthly mortgage payment, but unless homeowners have an FHA loan, they should be able to request that PMI be removed after they accumulate 20 percent equity in the property.

Q. How do I get preapproved for a mortgage?

The best home mortgage lenders often allow prospective borrowers to apply for preapproval online through their websites, but in some cases home buyers will need to speak directly to a loan officer. The lender will likely request information regarding the borrower, their finances, and the property before reviewing the application. Home buyers will also need to agree to a hard credit check—which involves a thorough review of their credit report and may impact their credit score—when applying for preapproval.

Q. How much money do I need for a down payment?

Conventional wisdom would say that a 20 percent down payment is necessary to buy a house, but although a down payment of that size would enable borrowers to avoid paying PMI, they may still qualify for a home loan with a much smaller down payment amount. Lenders may have their own down payment minimums to consider, but home buyers could also look at certain government-backed loans with more flexible requirements. VA loans, for instance, do not require a down payment at all in some cases.

Q. What is a VA loan?

VA loans are specialized mortgage products that are guaranteed by the Department of Veterans Affairs. They are only available to active or retired service members and their families, so they are not an option for every home buyer. Eligible borrowers may find that the best VA mortgage lenders offer many benefits over those of conventional home loan lenders, though, including the aforementioned zero down payment requirement and relatively low interest rates.

Q. What is a USDA loan?

USDA loans are mortgages backed by the U.S. Department of Agriculture and are made available to residents living in certain rural communities. Eligible borrowers may be able to get a USDA loan without making a down payment on their new home. USDA loans may also offer relatively low interest rates compared with conventional home loans.

Q. What is an FHA loan?

FHA loans are government-backed mortgages insured by the Federal Housing Administration. By insuring these loans, the FHA encourages lenders to extend mortgages to borrowers who would otherwise not meet their lending standards. FHA loans offer flexible down payment options and credit score requirements, making them a potential financing option for first-time home buyers.

Q. What is an adjustable rate mortgage (ARM)?

An adjustable rate mortgage (ARM) is a home loan that starts out with a fixed-rate period before adjusting the interest rate at regular intervals. ARMs may initially have lower interest rates than fixed-rate loans, but ARM rates could increase later on if prevailing mortgage rates go up.

Q. What is a jumbo loan?

Jumbo loans are mortgages that have loan amounts exceeding the limits established by the Federal Housing Finance Agency (FHFA). Those limits are typically updated on an annual basis—FHFA conforming loan limits currently stand at $647,200 in most areas. Jumbo loans are often considered to be risky for lenders since they cannot be easily packaged and sold on secondary markets. As such, borrowers may face stiffer eligibility requirements when applying for a jumbo loan compared with a conforming loan.

Q. What is the difference between a 15-year and a 30-year term?

Choosing a 30-year term on a fixed-rate loan will result in a lower monthly payment because the amortization schedule is spread out over a longer period of time. However, 15-year loans typically have lower interest rates, and borrowers will likely save thousands of dollars in interest on a 15-year loan versus a 30-year loan, impacting the mortgage’s total cost.

Q. What is my debt-to-income (DTI) ratio?

Debt-to-income ratio is the percentage of a person’s monthly gross income—before withholding taxes, Social Security, health care premiums, etc.—that they spend on their recurring debt. Lenders weigh DTI when reviewing mortgage applications and may have DTI requirements that borrowers need to meet to qualify for a loan.


Jeff Keleher Avatar

Jeff Keleher


Jeff Keleher joined the Bob Vila team as home finances editor in May 2022. With a decade of professional writing experience, he has created heavily researched educational content for mortgage lenders, financial service firms, and insurance companies. As a homeowner himself, Jeff continually strives to simplify the complexity of home finances so consumers can make the best choices. When he’s not busy writing, he enjoys cooking, playing guitar, and taking on new DIY projects around his 130-year-old house.