Best Illinois Mortgage Lenders

Illinois has a lot to offer, from its rolling hills to shiny skyscrapers. Ready to buy a home in the Land of Lincoln? Here’s everything you need to know to find the best Illinois mortgage brokers. 

Best Mortgage Lenders in Illinois

Mortgages Explained

Mortgage rates are just one aspect of a home loan. When you get a purchase or refinance quote, you may be asked which mortgage type and mortgage term you’re considering. The mortgage type refers to whether the mortgage is guaranteed by a government agency. The mortgage term is how long your mortgage will last. 

Mortgage Types

Here are the most commonly used mortgage types:

• FHA: The Federal Housing Administration (FHA) is in charge of FHA mortgages. It sets the basic rules and guarantees these mortgages, which are offered through private lenders. FHA mortgages have a down payment requirement of 3.5% for borrowers with a credit score of 580 or higher. Borrowers with a credit score of 500 – 579 need to make a down payment of 10% or more. All borrowers must pay for FHA mortgage insurance. 
• VA: Current and retired service members may qualify for a VA loan. The Department of Veteran Affairs secures these loans and sets the underwriting guidelines. They have flexible credit requirements. Qualified service members may not be required to make a down payment. You don’t have to pay for mortgage insurance with a VA mortgage. 
• Conventional: Conventional mortgages don’t come with a government guarantee. They often have more stringent credit requirements. You may need to purchase private mortgage insurance (PMI) per month if you put down a down payment of less than 20%. PMI protects the lender if a borrower stops making payments on a home. 

Mortgage Terms

Here are a few common mortgage terms:

• 30-year fixed: A 30-year fixed-rate mortgage is typically one of the longest mortgage term lenders offer. If you make the monthly required payments (no extra payments), your mortgage payments last 30 years. A fixed-rate mortgage has a consistent interest rate for the entire loan term. Your monthly payment is always the same. 
• 15-year fixed: A 15-year fixed-rate mortgage has higher monthly payments than a 30-year mortgage but it often carries a lower interest rate than a 30-year mortgage. This is because a shorter term is less of a risk to the lender. A lower interest rate and shorter term mean you pay less over the life of the loan with a 15-year loan vs. a 30-year loan. 
• 5/1 ARM: A 5/1 ARM is an adjustable-rate mortgage. Most ARMs start with a fixed initial period. After that, lenders adjust the interest rate based on market conditions. This means the monthly payment changes too. A 5/1 ARM has a 5-year period with a fixed rate. After that, the interest rate changes annually.

Mortgage Brokers vs. Lenders

Some borrowers work with mortgage brokers to find the best lender. Mortgage brokers often work with multiple lenders. They learn about you and your financial background. Once they get to know you, brokers match you with the best lender. They may also help you through the application process. You can choose to work with a broker or directly with a lender — either way, take the time to carefully review your mortgage quotes and choose the best one for you. 

Which Mortgage Lender is Best for You?

Which mortgage lender should you choose? The best way to start is by contacting at least 3 lenders to get a sense of their rates. You can also have a broker contact multiple lenders on your behalf. Here are a few other things to look for: 

• Strong recommendations: Ask your family members or friends about lenders they’ve worked with and their experiences. If you work with a financial professional like an accountant, ask them about who they recommend and why. If you’re working with a broker, that broker can also help steer you in the right direction. If you’re choosing a lender on your own, look for reviews on a neutral 3rd-party platform. You can also check the Better Business Bureau website to see if the lender has had complaints.
• Ethics: Does the lender or broker seem genuinely interested in finding the right product for you? Or do you feel pushed to choose a product that they prefer? A good lender or broker will guide you to the products that will serve you the best. If you feel pressured to choose a certain loan product, you may want to work with another lender. 
• Service: How responsive is the lender? Does the lender make you feel valued? If you feel like you aren’t a priority, consider looking for a different lender. Your mortgage is one of the biggest financial transactions of your life. You deserve excellent service. 
• Technology: Updated technology can help the mortgage process to move faster. Some lenders allow you to upload documents digitally or even securely link to your bank accounts so they can verify information quickly. Does your lender offer helpful technological tools?
• Discounts: Some lenders offer discounts on mortgage products. For example, some banks offer a discount on closing costs or application fees if you have an account. Ask potential lenders and brokers about discounts. 

Lender Credit Score Minimums in Illinois

Your credit score is a 3-digit number that gives lenders an insight into your credit history. Credit scores typically range from 300 – 850. A higher credit score shows that you’ve been responsible with your credit. It means you’ve done things like make debt payments on time and kept your credit balances relatively low. A lower credit score means you’ve had some challenges when it comes to handling credit. 

Lenders set minimum credit scores for borrowers. Borrowers who don’t meet the minimum may not be able to get a mortgage without improving their score. Your credit score and history also impact your interest rate. Lenders may offer borrowers with a higher credit score a lower interest rate. Here are the credit minimums for several Illinois lenders.

Current Mortgage Rates in Illinois

Lenders change mortgage rates every day. They make changes to reflect economic changes. For example, if the 10-year bond price changes or if the government releases an unemployment report, lenders might increase or decrease interest rates to reflect that information. At Benzinga, we update our rates frequently to reflect the most relevant information. Here are the current rates for 3 popular types of mortgages: 

Average Days to Close on a Loan

Closing signals the end of your mortgage process. It means your lender has finished reviewing your financial background. Your lender has approved your mortgage and it’s time to sign all the paperwork. You sign the paperwork during your closing meeting and pay any money due, like the balance of your down payment and closing costs. Your closing documents should be ready 3 days before closing. Here’s how long it takes several Illinois lenders to close on a mortgage.

Finding the Right Illinois Mortgage

Finding the right mortgage takes time. Even if you’re working with a broker, you still need to keep a close eye on the process. Review your mortgage quotes carefully, compare loan terms, loan types and lender fees. Choose the lender that combines a great rate with excellent service.