There’s no shortage of mortgage lenders to choose from, but online lenders are an increasingly popular option for borrowers. They offer key benefits like streamlined online mortgage applications, secure document upload options, expedited underwriting processes and potentially reduced loan costs. While traditional lenders typically require an in-person closing, some online mortgage companies let you handle everything online — from preapproval to a virtual closing.
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To help you get a mortgage from the comfort of your home, we’ve analyzed the top lenders in the market, prioritizing those with fully digital processes, low rates and accessible eligibility requirements.
Minimum Credit Score
580 for FHA and VA loans, 620 for conventional mortgages and 680 for jumbo loans
Days to close
Average closing time is 36 days for a conventional mortgage; 21 days for a refinance
On Rocket Mortgage’s Website
Methodology
To determine the best online mortgage companies, CNN Underscored Money editors and data researchers reviewed 29 companies that allow borrowers to receive online mortgage preapproval. We judged them across four categories: interest rates, loan details, eligibility criteria and repayment experience. The seven lenders on our list earned the highest out-of-5 ratings among their competitors. View our complete methodology below to learn more about how we chose our picks.
- 29 companies reviewed
- 551 data points analyzed
- 19 loan features considered
- 33 primary data sources used
Better Mortgage
Best online mortgage lender
Why we picked it
Better Mortgage boasts one of the fastest closing times in the industry. The current national average is 42 days from application to close, according to ICE Mortgage Technology — but Better claims to offer closings up to 17 days faster than average, which means you might close your mortgage in as few as 25 days after applying. This lender also offers a 100% digital mortgage process, including an online closing.
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A key benefit of a Better loan is its signature One Day Mortgage — some borrowers can receive a loan commitment letter (a step beyond preapproval that includes partial underwriting) in just 24 hours. Better also trims $2,000 off your mortgage closing costs when you work with a partner real estate agent. What’s more, Better will match the rate and some fees of competitors if you land a better rate from another lender.
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But according to J.D. Power’s 2023 Mortgage Origination Satisfaction Study, Better is below average for customer satisfaction. It doesn’t offer USDA loans, and details on some of its loans are hard to find on its website.
Pros
- 100% digital mortgage process, including closing
- Faster-than-average closings
- Rate matching
- No lender fees
- Savings at closing when you work with a partner agent
- 24-hour loan commitment
- Rate lock up to 75 days
- Available nationwide
Who should use it
Borrowers who want a fully digital mortgage process and a fast closing time
Tomo
Why we picked it
Founded in 2020, Tomo is a relatively new mortgage lender, but it has some features that set it apart. First, Tomo has one of the longest mortgage rate locks of any lender — you can lock in your rate for up to 120 days, even if you haven’t found a home yet. Your rate won’t be affected if market rates go up, and if rates fall, you can float your rate down. Locking your rate costs $450, but those funds will be applied as a lender credit if you close the loan.
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Tomo also lacks lender fees. It’s one of just a handful of lenders that doesn’t charge any origination or loan processing fees. And like Better Mortgage (above), Tomo will match another lender’s offer on a loan with identical terms.
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Despite its benefits, Tomo doesn’t offer USDA loans or mortgage refinancing. And since it’s a new player in the mortgage industry, Tomo is only available in 22 states: AZ, CA, CO, CT, FL, GA, ID, IL, MD, MI, MN, NJ, NC, OH, OR, PA, SC, TN, TX, VA, WA and WI (plus the District of Columbia).
Pros
- 90 and 120-day rate locks with one-time float-down option
- No lender fees
- Rate matching
- Below-average interest rates
Cons
- No USDA loans
- Not available in 28 states
- No mortgage refinancing
- No mobile app
Who should use it
Borrowers who want to lock in their rate far in advance, even before finding a home
Mr. Cooper
Why we picked it
Mr. Cooper offers starting mortgage rates below the national average, and it’ll drop your interest rate by one percentage point for the first year of your mortgage with its Mortgage Markdown incentive. Its robust mobile app allows you to make monthly payments on the go, check your FICO credit score and access mortgage documents. Plus, if Mr. Cooper can’t close the loan on schedule (due to their error or delay, not yours), you’ll receive a check equal to your first month’s mortgage payment.
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Unfortunately, Mr. Cooper’s customer satisfaction leaves much to be desired. It received below-average scores for both mortgage origination and loan servicing, according to J.D. Power, and it suffered a cyberattack in late 2023 that leaked the personal data of as many as 14 million customers. And although this lender offers a fully online application process, you’ll have to agree to an in-person closing meeting.
Pros
- 90-day rate lock with float-down option
- On-time closing guarantee
- Highly rated mobile app
- Available nationwide
Cons
- Below-average customer satisfaction
- Recent security breach
- No online closing
- No USDA loans
Who should use it
Borrowers who qualify for Mr. Cooper’s lowest rate and can drop it even lower for the first year
Rocket Mortgage
Best for low down payments
Why we picked it
Rocket Mortgage is the only online lender on our list that allows lower-income borrowers to get conventional loans with a down payment under 3%. With Rocket Mortgage’s ONE+ program, eligible borrowers can put just 1% down on a conventional loan up to $350,000, while Rocket Mortgage pays the other 2%. To qualify, your annual income must be 80% or less of your county’s median income. Remember, if you make a down payment of less than 20% of your loan amount, you’ll have to maintain private mortgage insurance (PMI).
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This lender also boasts some of the most highly rated customer support scores in the industry, ranking near the top of all companies for both mortgage origination and mortgage servicing, according to J.D. Power. Rocket provides the standard 15- and 30-year mortgages but also offers custom terms between eight and 29 years. Plus, a lender representative told CNN Underscored Money that its average time to close is less than 30 days, nearly two weeks faster than the nationwide average of 42 days.
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However, Rocket Mortgage is the only online lender on our list that charges interest rates higher than the industry average. Additionally, Rocket Mortgage doesn’t offer USDA loans.
Pros
- Low down payments on conventional loans for lower-income borrowers
- Highly-rated customer satisfaction
- Custom loan terms
- Fast preapprovals and closing
- Online closing available in most areas
- Highly rated mobile app
- Available nationwide
Cons
- Above-average interest rate
- No USDA or construction loans
- No loans for manufactured or mobile homes
Who should use it
Low-income borrowers who qualify for a 1% down payment on a conventional loan
SoFi
Best for one-stop borrowing
Why we picked it
SoFi is one of the most popular online lenders — not just for home loans, but also for the best private student loans, low personal loan rates and more. In fact, once you have one SoFi loan of any type, you can qualify for a rate discount on subsequent loans. SoFi borrowers can access many members-only perks, including free financial planning, discounts on estate planning services, travel rewards and community events.
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Also, if your SoFi home loan doesn’t close on time and it’s the lender’s fault, you’ll get a $10,000 credit toward your closing costs and other expenses caused by the delay. (Many lenders offer closing guarantees, but SoFi’s is the most generous we’ve found.)
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SoFi also has a rate lock that beats out many of its competitors — your rate will be locked for 91 days after preapproval, though you must have a purchase contract within 60 days. If interest rates drop by more than 0.25 percentage points during that time, you can request a one-time float down.
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Unfortunately, like many popular online lenders, SoFi doesn’t offer USDA loans. It also has a high credit score requirement for its FHA loans. These government-backed loans are typically available to borrowers with credit scores as low as 500, but SoFi requires scores of at least 600 for both FHA and VA loans.
Pros
- $10,000 close on time guarantee
- Rate lock of up to 91 days
- Below-average interest rates
- Highly rated mobile app
- Purchase loans available nationwide
Cons
- Requires a 600 credit score for government-backed loans
- No USDA loans
- No online closing
- No mortgage refinancing in New York
Who should use it
Borrowers who want a lender that can meet many borrowing needs
Guaranteed Rate
Why we picked it
Guaranteed Rate offers the widest variety of mortgage types of the lenders we reviewed. In addition to the most common mortgages (like conventional, jumbo, FHA and VA loans), this lender also originates reverse mortgages, interest-only mortgages and non-qualified mortgages for borrowers who aren’t eligible for a conforming loan. Guaranteed Rate is the only USDA-approved lender on our list.
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This lender also stands out for its lightning-fast, fully online process — you may receive loan approval in one business day and close the loan in as few as 10 business days. (Keep in mind that you’re unlikely to progress through underwriting this quickly unless you have strong credit, high income and a simple loan application.) Guaranteed Rate also ranked highly on our list of the best mortgage lenders.
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Unfortunately, Guaranteed Rate ranked poorly for customer satisfaction during origination, falling well below the industry average in the latest J.D. Power study. And although it does offer fully digital closing in some states, borrowers in other states aren’t eligible (and Guaranteed Rate doesn’t specify eligible locations).
Pros
- 100% digital mortgage process, including closing
- Same-day mortgage approval
- 90-day rate lock with float-down option
- Offers USDA loans
- Highly rated mobile app
- Available nationwide
Cons
- Poor mortgage origination satisfaction
- Fully remote closing not available in all states
Who should use it
Borrowers who want to compare several loan types to find the right fit
Chase
Why we picked it
If you’re planning to buy a home that exceeds the conforming loan limits — $766,550 for most areas in 2024 — you’ll need a jumbo loan. Chase offers jumbo loans up to $9.5 million with down payments as low as 10%. And with Chase’s Relationship Pricing Program, you may be able to save on your jumbo interest rate — or APR for other loan programs — if you’re an existing Chase customer (though you’ll need a six-digit account balance to qualify).
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Chase also offers programs for first-time homebuyers and low-income borrowers getting a conforming or government-backed loan. Its DreaMaker mortgage boasts a 3% down payment requirement, and if you’re buying a home in one of 14,000 minority communities within designated census tracts, you might receive a homebuyer grant worth up to $5,000 toward your closing costs and down payment.
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A key downside of getting a mortgage through Chase is you can’t complete your preapproval entirely online. Instead, you start the preapproval online and then must speak with a Home Lending Advisor to complete it.
Pros
- Generous jumbo loan terms
- Homebuyer grant for select borrowers
- Customizable sample rates
- Highly-rated customer satisfaction
- Available nationwide
Cons
- Preapprovals aren’t 100% digital
- No USDA loans
- Website doesn’t provide much information on loan details
Who should use it
Borrowers who want a multi-million dollar loan or existing Chase customers with large account balances who can qualify for the rate discount
What is an online mortgage, and how does it work?
You can apply for a mortgage entirely (or almost entirely) from home without needing to visit a physical branch location — though some online lenders also offer in-person services. Depending on your lender and state, you may even be able to close the loan online.
Online mortgages are increasingly popular with borrowers. This could be because they may offer lower origination costs, better loan options and improved customer support compared to traditional loans, according to a recent study by Forbes Insights and Freddie Mac.
Online mortgages vs. traditional mortgages
It’s tempting to categorize online and traditional mortgages separately, but they’re practically the same. Whether you choose the online or traditional route, you must meet the same eligibility requirements. Additionally, you’ll have access to the same types of loans, including conventional, government-backed and jumbo mortgages.
The biggest difference between online and traditional loans is the process. While online mortgages allow you to complete most or all of your application and closing digitally, traditional mortgages may require more in-person or phone communication with a loan officer. They may also take longer to complete since less of the process happens digitally.
Current online mortgage rates
After hitting an all-time low of 2.65% in Jan. 2021, mortgage rates have steadily climbed, hovering around 7% in mid-May 2024.
At its latest meeting in May 2024, the Federal Reserve opted not to lower interest rates until it has greater confidence in its ability to meet and sustain its target inflation rate. Industry experts previously projected moderate rate drops through the course of 2024, but with inflation remaining stubbornly high, it’s unlikely they’ll fall much.
Related >> How are mortgage rates determined?
Do online mortgage lenders have better rates?
Online mortgage companies tend to have lower overhead costs than brick-and-mortar lenders, and they may pass those savings on to you in the form of lower interest rates and fees. In fact, all but one of the lenders on our list has interest rates below the industry average.
But regardless of the lender you choose, the best rates are reserved for borrowers with excellent credit scores and a low amount of debt relative to their income. To get the best mortgage rate, shop around with multiple lenders and compare rates between several banks, credit unions and online mortgage companies.
Pros and cons of online mortgages
Completing the entire mortgage process from the comfort of your home provides a level of convenience you won’t find with traditional loans. And because the preapproval process is digital, it’s often much quicker than getting preapproved with a traditional lender, which may require scheduling time with a loan officer or mortgage broker.
Online mortgages often have faster closing times as well. In fact, processing times for online mortgages are 20% faster than for traditional mortgages, according to the Federal Reserve Bank of New York.
Plus, online mortgages can help reduce costs — thanks to the reduced overhead for the lender, borrowers may be eligible for lower interest rates and fees, and some online lenders don’t charge any lender fees at all. By considering online mortgage companies, you greatly expand the number of lending options at your fingertips. Most online lenders offer loans nationwide, so you aren’t limited to your local bank or community credit union.
But if you value personalized service or face-to-face interactions, online mortgages might not be right for you. They could be especially disadvantageous for first-time buyers who feel confused or overwhelmed by the mortgage process and need a loan officer to guide them. With that said, some of the best online mortgage companies also have physical locations, and some online-only lenders have loan officers available to meet with you virtually.
Applying for an online mortgage in 5 steps
1. Check your credit
Checking your credit scores is one of the most important things you can do before applying for a mortgage. Each lender requires a minimum credit score for its various home loans, and knowing where you stand can help you determine which lender (or loan program) is best for you.
You should also review your three credit reports for free from AnnualCreditReport.com. Look for red flags that might concern a lender, like too much debt, previous bankruptcies or foreclosures and maxed-out credit cards. If you spot any inaccuracies, dispute the errors with the reporting credit bureau.
Related >> How to buy a house with bad credit
2. Examine your budget
Before committing to 15 or 30 years of mortgage repayment, examine your budget to ensure you can afford the monthly dues. Remember that your monthly expenses will also include property taxes, homeowners insurance and mortgage insurance, if applicable, not just loan costs. An online mortgage calculator can help you identify the best loan amount based on your budget.
3. Gather financial documents
During the mortgage underwriting process, your lender reviews your financial background to ensure you have a history of responsible credit usage and the means to pay the loan as agreed. You must provide documents to verify your income and debts, plus personal identification documents. Your lender may request the following:
- Proof of identity, typically a government-issued form of ID, like a driver’s license
- Proof of employment income, including pay stubs, W-2 statements and tax returns
- Proof of other income, such as child support, alimony or pension payments
- Proof of assets, including statements for your bank, investment and retirement accounts
- Proof of liabilities, including loan and credit card statements
Having these documents readily available for your lender can help the mortgage process move more smoothly. Failure to provide the requested documents quickly can lead to processing delays.
4. Rate shop with multiple lenders
Interest rates can vary considerably from one lender to the next, so it’s important to get rate quotes from several lenders — usually at least three — to find the cheapest offer. In fact, shopping around might save you between $600 and $1,200 annually, according to Freddie Mac.
When you compare online mortgage rates, look at each loan’s annual percentage rate (APR), which represents both the interest rate and fees to show your total yearly loan costs.
Example: Let’s say you’re shopping for a 30-year mortgage and receive three rate quotes for a $300,000 loan. The table below shows how even a small difference in rate can add up over a three-decades-long repayment term.
In this case, considering the difference between Loans 1 and 3, shopping around could save you $205 monthly and $73,939 in overall interest charges.
5. Get preapproved
After you’ve narrowed your search, submit a preapproval application with the mortgage lender you choose. Preapproval helps you snag the best rate and makes you a more attractive homebuyer. Sellers are more likely to accept an offer from a preapproved borrower, knowing you’re a safer bet to qualify for a loan.
Preapproval is only valid for a certain period, often 30 or 60 days. Many lenders allow you to lock your rate during that time to protect you from rising interest rates. If your preapproval expires, you must reapply or find a new lender.
7 tips for increasing your odds of approval with an online lender
- Improve your credit scores. Although you may qualify for a conventional loan with credit scores as low as 620, aim for scores closer to 700. It can take at least several months to make an impact on your credit scores, so start this process well before you intend to apply. Focus on making all payments on time, avoiding new credit applications and disputing errors on your credit reports.
- Pay down other debt. Significant debt can harm your chances of being approved for a mortgage because it affects your debt-to-income ratio (DTI), the percentage of your gross income used for debt payments each month. (Some lenders may accept DTIs as high as 50%, but 43% or lower is often preferred.) As a bonus, paying off debt will also boost your credit scores.
- Aim for steady employment. You’ll generally need at least two years of employment history to qualify for a mortgage. You may still be eligible with self-employment income or frequent job changes if you have other compensating factors, such as a large amount of savings and high credit scores.
- Prepare documents in advance. Regardless of the type of loan you’re getting, you must provide some basic financial documents to verify your income and employment. By gathering these documents ahead of time, you can expedite the underwriting process and avoid processing delays.
- Save for a down payment. The minimum down payment for a conventional loan is typically only 3%, but you can improve your chances of approval by saving a larger down payment. Plus, if you can save at least 20%, you’ll avoid paying for PMI and keep your monthly costs down.
- Build cash reserves. Lenders want to see that you can continue making your loan payments even if you encounter financial hardship. Having enough money in the bank to cover six months’ worth of mortgage dues can help you qualify and may even offset a lower credit score or high DTI. Having cash on hand will also be helpful for immediate home improvements.
- Explore your loan options. Though a conventional loan is the most popular type of home loan, it’s certainly not the only one. If you have a lower credit score, income or down payment, you might increase your chances of approval by applying for a government-backed loan, such as an FHA loan, VA loan, or USDA loan.
Methodology
Our editors combined forces with our data research team to collect more than 550 data points to determine the best online mortgage lenders. Ultimately, we rated the 29 lenders under consideration across the following four categories:
Loan cost (30%)
Mortgage rates are higher than they were several years ago, so securing the best rate possible is a high priority. We prioritized lenders that disclose rates online and also considered how those rates compare to the national average. Lenders that offer long rate locks and opportunities for rate discounts also fared well.
Loan details (35%)
Even some of the best so-called “online mortgage lenders” require speaking to a loan officer over the phone. So, we awarded points to companies that empower borrowers to complete the entire application process online, including a virtual closing. We also considered key factors like minimum down payment requirements, loan types and repayment terms offered and whether the lender offers any special homebuying programs.
Eligibility (20%)
This category was simple: Can most borrowers qualify for a mortgage with this lender? We weighed criteria like geographic availability, minimum credit score requirements and whether the lender considers alternative credit data.
Customer experience (15%)
In addition to J.D. Power studies referenced above, our editorial team also relied on independent sources like the Better Business Bureau and the Consumer Financial Protection Bureau. We put each lender’s customer service, mobile app, marketing materials and track record under the microscope.
What didn’t make the cut
Online lender Homefinity scored highly on our rubric, coming in third with a near-perfect rating of 4.9. However, shortly after our scoring concluded, Homefinity’s site began redirecting to parent company Fairway Independent Mortgage. Phone numbers associated with Homefinity are no longer in operation. Since we couldn’t confirm whether Homefinity still originates mortgages, we removed them from our list of the best online mortgage lenders.
Other popular online lenders scored highly but fell short of making our final list for various reasons, often a lack of transparency. Here’s a look at a few examples of lenders that didn’t quite measure up:
- New American Funding, Wintrust Mortgage and Andrews Federal Credit Union don’t offer fully online mortgage applications.
- Fairway Independent Mortgage, loanDepot and NBKC Bank don’t disclose rates online.
- Carrington Mortgage and Pennymac have starting rates above the national average.
- Ally Bank doesn’t offer any government-backed loans.
Frequently asked questions (FAQs)
Are online mortgage lenders trustworthy?
While online mortgages might be a newer concept, these loans are generally safe. The loans you might borrow through an online lender are the same as those you’d get through a traditional lender. However, it’s still important to vet your lender to ensure they’re reputable — start by looking at their listing with the Better Business Bureau and reading customer reviews.
How long does online mortgage approval take?
The time from application to closing depends on your lender. Some online lenders offer preapproval immediately or within the same business day, while others might take closer to a week. The average mortgage currently takes about 42 days to go from application to close, but you may find lenders who can trim that timeline down to three weeks or less.
Do online mortgages have closing costs?
Yes, all mortgages — even online loans — have closing costs. Many of these costs are required by the government or paid to third-party service providers and are unavoidable. However, some lenders help you reduce out-of-pocket costs by charging no lender fees (including for origination, application or underwriting).
Can I refinance with an online mortgage lender?
An online lender can be a great option if you want to refinance your mortgage. Nearly all the lenders on our list offer mortgage refinancing with the same benefits you’d get from applying for a home purchase loan.
