Benzinga readers often choose New American Funding as the best mortgage lender.
Conventional mortgages are a popular option for many home buyers. But what is a conventional mortgage and is it a good fit for you? Here’s Benzinga’s guide to conventional mortgages and the best conventional lenders for the home-buying process. Remember, you have several variables to consider, including loan terms, closing costs, mortgage interest rates, property taxes, private mortgage insurance, origination fees, an online appliance and more.
The Best Conventional Mortgage Lenders
Best Conventional Mortgage Loan Lenders
Choosing a lender is a big decision. Here are Benzinga’s picks for the best conventional lenders based on our research. Mortgage rates and APRs are listed. The APR rate is higher because it includes points, mortgage broker fees and other charges.
1. Best for Bank Statement Loans: Angel Oak Mortgage Solutions
Angel Oak Mortgage Solutions is a full-service mortgage lender offering traditional and portfolio Non-QM mortgage loans. Angel Oak is licensed in 45 states and offers competitive mortgage rates and quick closing times.
Angel Oak Mortgage Solutions offers a wide range of mortgage solutions for various needs. Whether you are looking to purchase a home, cash-out on your current property, or refinance at a different rate, they have options for you.
With loan amounts available up to $3.5 million, they can support you in financing properties of different values. They cater to primary residences, second homes, and investment properties, and accommodate various types of properties such as single-family homes, townhomes, and condos.
As an added convenience, they offer options for self-employed borrowers and real estate investors who may not have tax returns readily available. They also provide opportunities for those with 1099 income and offer government loan products like FHA, USDA, and VA loans.
With competitive rates on conventional purchase and refinance, Angel Oak Mortgage Solutions ensures that you have options to suit your financial goals.
- Considers unique borrower situations
- Quick loan approval process
- Offers competitive interest rates
- Stricter qualification requirements
- Higher interest rates and fees
2. Best Overall: Rocket Mortgage®
Rocket Mortgage offers top-notch customer service. It’s been rated highest in customer satisfaction for Primary Mortgage Origination and Mortgage Servicing by J.D. Power. This means you receive outstanding service at every step of the mortgage process.
You can talk to loan experts via chat or by phone. They also offers extensive educational resources on its website to ensure you’re fully informed about your mortgage options.
Rocket Mortgage offers fixed- and adjustable-rate conventional mortgages, as well as FHA, VA and jumbo mortgages.
- Apply online through their website
- Faster loan processing times
- Variety of mortgage options
- Lack of personal interaction
- Inability to negotiate terms
3. Best for a Variety of Options: New American Funding
New American Funding offers conventional, proprietary and government-backed mortgages. Its variety of mortgage options make it worth checking out, especially if you have unique financial needs. It also offers options for refinancing and tapping into your home equity. Its loan products aren’t available to New York or Hawaii residents.
New American Funding is a good choice for self-employed borrowers. It allows you to use bank statements to verify your income instead of trying to qualify with tax returns, W-2s or pay stubs, which you might not have with a fluctuating or lump-sum income.
New American Funding is also an excellent lender for first-time home buyers. You can opt for an FHA, USDA or VA loan. New American Funding also has educational resources to help you understand the mortgage process.
It may also be a good fit for senior homeowners looking for a reverse mortgage. A reverse mortgage allows you to take advantage of the equity you’ve built up in your home. It’s not for everyone, but it’s worth considering if you’ve built up significant equity in your home but have concerns about your income in retirement.
New American Funding recommends you have a credit score of at least 640 and are ready to provide a downpayment of 20%.
- Convenient digital tools for easy loan application and management
- Personalized customer service
- Strong reputation for customer satisfaction and positive reviews
- Limited options for borrowers with unique financial situations or credit challenges
- Delays or issues with the loan approval process
4. Best for Traditional Bank: Bank of America
Bank of America offers a combination of in-person service and digital tools, making it a great choice if you prefer working with a traditional bank. You can choose what works best for you. If you prefer personal service, you can visit a branch near you and speak with a loan officer.
You can also prequalify and complete your full mortgage application online or talk to a lending specialist by phone. Bank of America also offers educational resources and tips on its website. It offers fixed- and adjustable-rate conventional mortgages, jumbo mortgages and FHA and VA loans. It also offers a proprietary mortgage for low- and moderate-income home buyers.
- Easily accessible for customers across the United States
- Wide range of banking and loan solutions
- User-friendly online banking platform and mobile app
- Higher loan origination fees
- Lengthy application and approval process
5. Best for First-Time Home Buyers: Guild Mortgage
If you’re a first-time home buyer, you might not be sure which home loan is right for you. You’ll also want to learn as much as you can about the mortgage process. Guild Mortgage can help with both.
You can work with a local branch or apply for a mortgage online. You can also choose from an impressive range of mortgages. It has fixed-rate and adjustable-rate conventional mortgages, mortgages with down payment assistance, FHA, VA and USDA loans and mortgages for manufactured homes.
Guild Mortgage also offers several mortgage calculators to help you decide on the right mortgage for you. It also has a first-time home buyer guide to help you through the process. Guild Mortgage doesn’t publish its rates online, so you’ll need to get in touch to get a personalized quote.
- Competitive interest rates and flexible loan terms
- Strong reputation for excellent customer service
- Extensive network of branch locations
- Not be the best option for borrowers with low credit score
- Delays in the approval process
6. Best for Service Members: Veterans United
Veterans United has a stellar reputation for service. It exclusively serves members of the armed forces and their families along with Department of Defense employees. You might expect Veterans United to focus on VA loans but it offers conventional mortgages and proprietary mortgage products as well.
Veterans United also offers an option to lock in an interest rate. This means that if interest rates get better before you close, you can take advantage of the lower rate. Your loan has to close within 60 days of your first-rate lock to qualify.
- Streamlined loan application process
- Competitive interest rates and loan terms
- Excellent customer service
- Funding fees
- Limited physical locations
7. Best for Low Fees: Better.com
Better.com already sets itself apart with its intuitive digital mortgage process. It makes the mortgage process relatively speedy and easy to understand. What really sets it apart is that it doesn’t charge any lender fees. Lender fees can add up to thousands of dollars, so that’s a significant savings.
Better.com is a great choice whether you’re planning to buy or refinance a home. It offers fixed- and adjustable-rate conventional mortgages. You can get pre-approved in less than 20 minutes so you know what you qualify for.
- Transparent pricing
- Fast approval and closing times
- Low interest rates
- Limited loan options
- Lack of in-person support
What is a Conventional Mortgage Loan?
- Conforming mortgages meet the requirements of Freddie Mac and Fannie Mae, which are private companies sponsored by the government. These companies insure conforming loans and the loans must be below certain limits and follow certain rules. Conventional loans fall into this category.
- Nonconforming mortgages don’t meet Freddie Mac and Fannie Mae’s requirements. There are 2 main reasons why a loan may be considered nonconforming — someone else can buy the loan or the loan is too large to be a conforming loan.
Some conventional mortgages allow first-time home buyers to make a down payment with as little as 3% down and competitive interest rates. If you make a down payment of less than 20%, you may need to pay for private mortgage insurance (PMI). This increases your monthly mortgage payments.
Conventional mortgages typically require a credit score of at least 620. Of course, the higher your credit score, the better. Individual lenders can let you know what their minimum credit score requirements are. Conventional mortgage lenders also typically require you to have a debt-to-income ratio of 50% or less.
What to Look for in a Conventional Lender
What qualities should you look for in a conventional lender? Let’s take a closer look.
- Stellar reputation: Look at all lender reviews, especially on 3rd-party websites. Ask family members or friends which lenders they’ve used and what they’ve heard about the lender you’re considering.
- Technology: Even if you don’t complete the entire mortgage process digitally, the right technology can keep the mortgage process running smoothly. If you can upload documents digitally or connect your lender to your bank accounts, it can save time. The sooner you can close, the better.
- Service: How does the lender respond to your request for a quote? Is the lender willing to answer your questions? Is the lender willing to educate you about your options? A good lender will help you make a decision that’s right for you.
- History: Reviewing the history behind a conventional lender also lets you know how often these companies sell the loans they originate. If you chose the lender because you liked their service, you may want to steer clear if they tend to sell their loans—pushing you off to another servicer that might not be as friendly or helpful.
5 Tips for Finding the Best Conventional Lender
How do you find the best conventional lender? Here are 5 tips.
- Know your credit: You can request a free copy of your credit report from each credit bureau every year. Request a copy and correct any mistakes. You may also want to get your credit score. This helps you know what rates to expect.
- Contact multiple lenders: It might be tempting just to contact 1 lender, but it’s best to contact at least 3. This helps you know your options so you can find the best rate.
- Ask for the same quote from each lender: Give each lender the same information about your credit score, income and assets. Ask each lender for a quote on the same product so it’s easy to compare quotes. If you get a quote for a 30-year mortgage from a lender and a quote for a 15-year mortgage from another, it’s harder to make an apples-to-apples comparison.
- Review your quotes: Look at each quote carefully. Look for fees, points and discounts.
- Negotiate: Ask your preferred lender if it can waive any fees or lower your rate. There’s no harm in asking. Remember, your lender will make quite a lot of money in interest on your loan—they can afford to give you something back. The question, then, is what they are willing to offer.
Based on your negotiations, choose the lender that provides the best combination of service and price.
Is a Conventional Mortgage Right for You?
A conventional mortgage might be right for you depending on your ability to make a down payment and your credit score. A good conventional lender can help you decide whether a conventional mortgage is the right fit. If it is, it can also steer you toward the right conventional mortgage. Take your time and evaluate your options to find the right mortgage for you.
For other mortgage loan options, check out these guides:
Frequently Asked Questions
Are conventional mortgages worth it?
You may prefer a conventional mortgage because you have more flexibility, but you will need to make a larger down payment.
Is it easy to qualify for a conventional mortgage?
A conventional mortgage generally requires a higher credit score and can be slightly more difficult to qualify for.
What is the downside of a conventional loan?
A downside to conventional loans is they come with higher closing costs over other loan options.
Get Ready for Take Off
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You can work at your own pace and someone is always there to answer your questions — 24 hours a day, 7 days a week. Want a fast, convenient way to get a mortgage? Give Rocket Mortgage® a try.