Best Online Mortgage Lenders for January 2025

These days, every mortgage lender with a national profile has an online presence. Most, if not all, allow you to start your home loan application online as well. However, only a few companies have been able to grow their mortgage lending businesses organically by leveraging technology and establishing early mover status as online lenders.

Yahoo Finance has completed due diligence on over 40 nationally recognized mortgage lenders and refined our list of top online lenders for just a few.

Yahoo’s point of view: It better plant the flag proudly as a “100% online” mortgage lender and earn our top spot due to a combination of lower interest rates and lower total loan costs than its competitors on the web.

Stars: 4.00

Read our full Best Mortgage review

Key Benefits

• Better offers a full list of conventional and government loans for home purchases and refinances.

• A home equity and cash back line of credit gives you access to the cash value of your home.

• In Yahoo Finance’s analysis of 2023 HMDA data, Better offered well below average interest rates and below average loan costs. This is a valuable combination.

• With a One Day Mortgage, you can provide your financial information and get a loan commitment within 24 hours.

Need to know

• On the day we checked, published mortgage rates had been cut by more than 2 discount points. Keep this in mind when you compare Better’s interest rates with rates from other lenders.

• In an effort to respond to customers more quickly, some of your inquiries may be handled by “Betsy,” an AI voice assistant.

Learn more: What are mortgage discount points, and do you have to pay for them?

Yahoo’s point of view: In 2015, Rate (formerly Guaranteed Rate) claimed to offer “the world’s first digital mortgage”. Now, it offers expanded loan eligibility with non-qualified mortgages.

Stars: 3.80

Read our Full Rate (Guaranteed Rate) Mortgage review.

Key Benefits

• It offers non-qualified mortgages to borrowers looking to use alternative credit data in their applications, such as bank statements or pay stubs, and those seeking a home loan with interest-only payments.

• Compete with cash buyers using Rate’s PowerBid Approval. This service speeds up the pre-approval process by quickly verifying your financial information and gives you flexibility in your home search for 90 days.

• The rate received our highest rating for affordability, which measures loan options and availability of down payment assistance.

Need to know

• Typical mortgage rates come with some strict credit conditions. Don’t like the price until it’s locked.

• In 2023, the rate offered a lower-than-average interest rate but loan costs of about $6,500 — near the industry average.

Read more: Non-QM Mortgages – How a Non-QM Loan Can Help You Buy a Home

LoanDepot

Yahoo’s point of view: LoanDepot deepens its relationship with customers by offering cash incentives for using its associated real estate agents.

Stars: 3.40

Read our full loanDepot mortgage review

Key Benefits

• The mellohome program offers cash rewards if you buy or sell your home using a loanDepot real estate agent.

• The lender guarantees the loan closes on time or $1,000 is paid to both the buyer and seller.

• Other benefits for homebuyers include discounts on security systems, transportation services, and smart home products.

Need to know

• No sample mortgage rates are provided on the LoanDepot website. You will have to call or submit a contact form to get an idea of ​​the rate you might earn.

• It received a below-average rating for customer service, according to Latest News JD Power Mortgage Origination Satisfaction Study.

Yahoo’s point of view: Ally is a leading online bank with a 100-year history. How does this work? It started as an in-house loan provider for General Motors vehicles. Today, Ally is one of the huge mortgage lenders worth considering.

Stars: 3.40

Read our full Ally Bank mortgage review

Key Benefits

• Ally received our highest rating for price transparency. When you shop around for mortgage interest rates, you’ll appreciate the ease of getting something close to reality.

• According to our analysis of 2023 loan data, Ally offered below-average interest rates and total loan costs.

• First-time homebuyers will appreciate the wide range of educational resources.

Need to know

• Don’t be confused: Ally’s pre-approval process is managed by Better Mortgage. But the ally is still your lender.

• Ally does not offer government loans, including FHA, VA, or USDA loans.

Read more: Conventional vs. FHA loans for homebuyers

Yahoo’s point of view: Rocket Mortgage brought online home loans to the masses. Today, it continues to innovate in mortgage offerings such as the conventional loan with an ultra-low down payment.

Stars: 3.06

Read our full Rocket Mortgage review

Key Benefits

• The One+ Mortgage Program uses a grant to reduce the down payment to 1%. Income limits and benefit maximums apply.

• A mortgage buydown program can temporarily lower your interest rate for the first two years.

• Closing cost assistance is available to first-time home buyers in 21 U.S. cities.

Need to know

• JD Power’s customer satisfaction score has declined in the past two years, but Rocket still ranks above average.

• A recent lawsuit filed by the Consumer Financial Protection Bureau accused sister company Rocket Homes of paying real estate agents to route mortgages to Rocket Mortgage. Rocket Homes denied the allegation and said it would appeal the lawsuit.

Dig deeper: How to buy a lower interest rate on your mortgage

We carefully studied the following mortgage lenders to make our top list, but they weren’t as strong as our top picks. Remember, many of these lenders offer online services — even if they didn’t originate as online lenders — so you can still complete most (if not all) of the application process digitally if you choose one of these companies.

Getting a home loan online is very similar to getting a mortgage in person. Either way, there’s a lot of paperwork, but you’ll be uploading it instead of handing it in. If you’re technically savvy, things may go faster online – mainly because you may be able to exchange documents faster. But getting a mortgage online still doesn’t require a quick click-to-buy from Amazon. The final loan approval process, called underwriting, is the same and will likely take a few weeks.

Learn more: How is the mortgage underwriting process done?

Comparing lenders online is much like shopping for any big ticket:

• You’ll want to compare several lenders by getting pre-approved offers to find the best one.

• Shop interest rates and loan costs with side-by-side comparisons of your loan estimates.

• Look for “junk fees” (such as origination and application fees) and discount points that you didn’t realize were added to your loan.

• Pay special attention to the annual percentage rate, which includes the interest rate and fees.

Dig deeper: APR vs Interest Rate — What you need to know when shopping for a mortgage

You have many options on where to get a home loan and the Internet is certainly among the best. However, you don’t want to rule out shopping at a traditional bank. Banks, credit unions, mortgage companies, and brokers are all worth paying attention to.

For example, your daily bank may offer interest rate concessions or fee reductions to existing customers. Credit unions are often low-tech but high-touch when it comes to customer service.

There is great power in introducing a little competition into the mix.

Of the more than 40 national lenders we studied, Better Mortgage is the highest-rated online lender with 4 out of 5 stars. It’s best to get high marks in every category we consider, except for price transparency. This is because Better reduces its advertised mortgage rates by more than two discount points. If you haven’t noticed, you might think Better’s rates are significantly lower than a lender that doesn’t incorporate the additional cost of discount points into its rates.

Among the banks Yahoo Finance reviewed, Chase, TD Bank, and Truist are the highest rated — each with 4 out of 5 stars. And one credit union topped them all: Marine Federal Credit Union, which received our highest rating of 4.20 stars.

Based on loan volume measured by HMDA data for 2023, Rocket Mortgage is the #1 mortgage lender In America.

Yahoo Finance considers Better to be the overall best choice for online mortgages. However, we also urge borrowers to consider two or three lenders before making a final decision. Your best option may be another provider entirely.

In Yahoo Finance’s analysis of HMDA data, two of the online lenders on our top list had the lowest interest rates: Better and loanDepot. Both offered well below average mortgage interest rates to borrowers in 2023.

methodology:

Yahoo Finance reviews and ranks mortgage lenders by scoring them in five basic categories: 1) Interest rates. Using 2023 Home Mortgage Disclosure Act data consisting of 10 million home loan applications, we score mortgage lenders on mortgage rates issued below or above the annual average of the reporting lenders. 2) Affordability. A measure of the availability of loan products and a lender’s willingness to offer government-backed loans, low down payments, down payment assistance, and consider non-traditional credit. 3) Loan costs. The HMDA data is analyzed again, and lenders are ranked based on their total loan costs compared to the annual average. 4) Transparency rate. The ability of a website user to obtain an estimate of the mortgage interest rate. We rank lenders based on whether rates are backed by discount points or high credit score requirements, disclaimers disclosing rate assumptions, sample rates advertised, and whether discount point rate estimates are subject to adjustment or none. 5) Online features. Analysis of educational materials, calculators and additional resources available to users.

A review of National Multistate Licensing System (NMLS) data on regulatory actions can result in a penalty for any lender that has taken an administrative or enforcement action related to a consumer mortgage within the past five years.

Advertisers or sponsorships do not influence ratings.

Mortgage Written Disclosure:

The information in this article has not been reviewed or approved by any advertiser. Details regarding financial products, including interest rates and fees, are accurate as of the date of publication. All products or services are provided without warranty. Check your lender’s website for the latest information. This site does not include all offers currently available.

This article was edited by Laura Grace Tarpley.