Best Mortgage Lenders for High Credit Scores

Responsiveness

While any mortgage lender you’re considering doing business with should be responsive when it comes to answering questions, how long the mortgage loan process actually takes is dependent upon multiple factors like how quickly you can submit required paperwork (i.e. paystubs, tax returns, credit reports) and how long the appraisal process takes.

According to Ellie Mae the average time it takes to close on a mortgage is 52 days.

One reason the underwriting process can be held up is due to missing paperwork. It’s important to get lenders the documents they need as soon as they need it.

Another reason could be due to having an inexperienced loan officer. Loan officers should know exactly what you need and be able to walk you through the home buying process.

If you’ve got great credit and other credentials, the refinancing world is wide open to you, but if you fall outside today’s lending standards, you’ll need to dig a little deeper.

For example, if someone who has what is considered bad credit wanted to refinance their home they might need to find a lender that would allow them to either file with a non-occupying co-borrower; as an alternative, they might need to find an FHA approved lender and learn what their guidelines are. On the other hand, if you do have what is considered a passable (620 to 660) or good credit score (661 to 780) you’ll most likely not have a hard time finding a refinancing lender considering that the majority of lenders are able to provide loans with a credit score of 620 and above.

Source: https://singlefamily.fanniemae.com/media/9391/display

Reputation of Service

You can save time by finding a mortgage lender who has a great track record of giving borrowers a good experience, quickly following up and being helpful throughout the process. Recommendations from friends, family or trusted professionals you work with can be useful. Also, there are ranking sources such as TrustPilot or JD Power that may provide some insight, too. You can also check with the Consumer Financial Protection Bureau, who offers a searchable database of consumer complaints. Keep in mind that these are only complaints – you won’t see any praise or positive reviews here, but you may be able to get a sense of whether or not you’re likely to encounter troubles with a given lender.

Flexibility in Underwriting

Any mortgage company that you’re thinking of using should have a few types of mortgage options for you to choose from. Some may have more options than others but there are typically:

Conventional Mortgage

A conventional mortgage is a loan that isn’t directly secured by a government entity and is the most common type of mortgage. According to Fannie Mae, while a conventional mortgage allows you to put down as little as 3% you must have a credit score of at least 620 to qualify and complete an official mortgage application while supplying all needed documents. It’s worth mentioning that any down payment that is less than 20% is going to require the borrower to pay for private mortgage insurance (PMI). This type of loan is best for borrowers who’d rather pay a higher down payment to have a lower interest rate.

Government-Backed Loans

Government backed loans are insured by an agency of the federal government. The three types of government-backed mortgages that homeowners can utilize are: FHA , VA and USDA. With these types of loans the backing agency insures the loan amount for the lender, protecting them in case the borrower defaults on their mortgage payments.

• FHA - FHA mortgages are commonly used with first-time homebuyers because of the lenient FICO score guidelines that allows borrowers with a weaker credit history or lower credit score (as low as 500) to secure a loan while only requiring a 10% down payment as opposed to other loan types where down payments are higher.

• VA Loans - VA loans are also backed by a government agency (US Department of Veteran Affairs). Active or previously serving military personnel are eligible for a VA loan if they meet the required length of service.

  Unlike other loans, VA home loans do not require a down payment or any private mortgage insurance (PMI) as a part of the loan term. There’s also no minimum credit score required and the debt-to-income ratio can be higher than normal.

  Learn more about VA eligibility requirements.

• USDA Loans - USDA loans are backed by the US Department of Agriculture and designed to serve low-to-medium income families who are looking to purchase a home in rural and some suburban areas. It’s also possible to not have to pay a down payment if you’re a first-time home buyer or meet the income requirements. There are also other associated fees including an annual fee and a 1% upfront fee of the loan amount, which can usually be financed with the loan.

Competitive Pricing

There are some lenders who are more transparent with their rates like Guaranteed Rate and others who do not display their rates online such as Loan Depot. When assessing costs keep in mind that there are multiple fees associated with a mortgage loan including:

• Mortgage Insurance

• Interest

• Principal

• Origination fees

• Points - (Learn more about points )

• Taxes

• Deposits

Knowing who you are as a borrower – your credit score, down payment or equity position, cash for reserves and more – and what you want in your loan can help you find a lender with the most competitive pricing for your loan. There’s a difference between contacting a lender and saying “I need a mortgage” and contacting a lender and saying “I need a 30-year fixed-rate loan, and don’t want to pay any points or spend more than $4,000 in fees. I have a credit score of 740, and have $25,000 to use for a down payment.” Knowing who you are and what you want will allow you to shop for and obtain the most competitive loan pricing for your needs. You’ll get a better understanding of your loan costs as you speak with your lender.