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Best Mortgage Lenders 2021

Last updated Nov 30, 2021 | By adam

Shopping for a new mortgage, mortgage refinance, home equity line of credit, or home equity loan can be tough — especially with so many mortgage companies and lenders to choose from. It can be a challenging process for both current and aspiring homeowners alike. That’s why we researched and created this list and included all the details on how they can help you reach your financial goals.

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How to pick the right mortgage lender for you

It’s worth taking your time to make sure you pick the right lender. And although it’s great to start by learning more about the mortgage lender and their various policies and offerings, ultimately you’ll want to cross-compare the offers you get and make sure the one you land on is something you’re comfortable paying.

Among other things, here’s an overview of some factors to consider when comparing loan packages from various mortgage lenders:

  • Down payment: Your loan offerings will vary based on the down payment you’re able to make. The more you put down, the less you’ll owe and the less you’ll pay in interest over the long haul. Aim to put at least 20% down to avoid paying private mortgage insurance.
  • Monthly payment: If you’re taking out a new mortgage or refinancing an existing one, one of the biggest factors of your loan will be your monthly mortgage payments. Be sure these payments are affordable for your family and won’t put any unnecessary financial stress on your budget.
  • Term length: Monthly payments will vary based on your loan length. The longer the life of the loan, the lower your monthly payment. Run the numbers with your lender to see what kind of term length works best for your needs. The term length may also impact the interest rate you get.
  • Interest rates: In addition to term length, you’ll want to talk to your lender to figure out whether your interest rate is fixed or variable. Although an ultra-low variable interest rate might sound good right now, many borrowers end up choosing fixed rates that can’t increase, in order to have a more reliable payment schedule. Beyond adjustable vs. fixed, you’ll also want to look for a lower rate in general so you can save big on interest charges over the years.
  • Fees: As with all things in life, loans come with fees. Your loan might have an origination fee, appraisal fee, underwriting fee, and more. Ask your lender what kind of fees it charges and to provide you with an estimate before you make your final decision.
  • Closing costs: In addition to your down payment, you’ll also want to have enough available cash to cover closing costs. Plan on putting aside anywhere between 2% to 5% of the value of the loan to pay your closing costs.
  • Customer reviews: If you’d like a little extra reassurance before working with a lender, you can always see what other people are saying about them by searching the Consumer Complaint Database of the Consumer Financial Protection Bureau.
How to improve your chances of mortgage approval

Finding a lender that offers the product and services you’re seeking is just the first step. After you shop around and find a few interesting lenders, you’ll want to start considering the rates they can offer. And although some of this will vary from lender to lender, a big part of getting the best loan terms and rates has to do with you and your finances. If you have an excellent credit report, then you might qualify for a lower interest rate or a larger loan amount.

Getting the best home loan might mean working to improve your credit score or even lowering your debt-to-income ratio. It might also mean saving for a house for longer so you can make a bigger down payment. The less money you have to borrow and the better your credit history and financial situation, the better rates you’ll qualify for.  

Another thing to keep in mind is to avoid spending large amounts of money while your loan is going through the approval process. Although it might be tempting to start shopping for furniture for your new home or to make some big home improvement purchases once you get your pre-approval letter for your HELOC, you should hold off until the loan is finalized and the money disbursed. Spending too early might lower your repayment power in the eyes of the lender, and ultimately prevent you from getting your loan.

Because lenders are ultimately analyzing your ability to repay your new loan, anything you can do to present a better picture of yourself as a borrower means the more likely you’ll be to get the best mortgage rates offered to you.

Bottom line

Maybe you’re trying to figure out how to get a loan to fund the purchase of your dream home, or maybe you’re hoping to refinance your current mortgage into something more affordable. There are an endless number of lenders out there that can help you with a home purchase or mortgage refinance. Be sure to take your time when shopping around for home loans and cross-compare rates before making any decisions.

If your work or finances haven't been stable and you’re concerned about taking out a loan, you might also consider getting mortgage protection insurance. Much like life insurance, these policies offer great peace of mind that your family will be taken care of even in the event you are unable to pay your mortgage.

There are a lot of ways to plan out your personal finances when it comes to borrowing money. Be sure to do your homework, and only take out loans you’re actually comfortable repaying. You can use this list of the best mortgage lenders to help you get started finding the perfect loan product and best real estate lender for you.

New American Funding

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