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Thursday, February 13th
loanDepot is one of the biggest names in home loans, with more than $275 billion funded across purchases and refinanced mortgages. They specialize in conventional loans, both fixed and adjustable rate, and they have some customer-friendly benefits like a "Lifetime Guarantee” on future refis and a firm "No Steering” policy. However, loanDepot isn't as transparent with current rates and terms, their application process asks for a full SSN a little too quickly for our liking, and complaints about their customer service have started to surface. We still give loanDepot an above-average rating, but the company no longer ranks as one of our most recommended home loan providers.
Ally is a well-known name in banking, with products ranging from banking and credit cards to home loans. You can get most traditional fixed- and adjustable-rate mortgages here, including jumbo loans if needed. This lender also has some unique perks, like its Home Grant program in certain metro areas, and their home loans don't come with many of the usual fees (like origination and underwriting). Although there are still some issues with the way Ally's mortgages are closed and serviced, Ally has done the work to improve its reputation, moving up from one of our lowest-ranked home loan providers to a solid rating.
When you're thinking about buying a home, getting a mortgage is likely going to be one of the biggest financial decisions you'll ever make. It can feel a bit overwhelming, especially if you're new to the process, but don't worry - once you understand the basics, it becomes much more manageable.
What are the basics? First off, there are different types of home loans. The most common are fixed-rate and adjustable-rate mortgages (ARMs). A fixed-rate mortgage keeps the same interest rate throughout the loan term of 10-30 years, while an ARM typically starts with a lower rate that can change over time, often after an initial fixed period of 3-10 years.
Then, there's the down payment: what you pay upfront towards the purchase price of your new home. Expect to put down at least 20% if you want to avoid paying PMI (Private Mortgage Insurance), but there are options for first-time homebuyers who can't come up with that much just yet.
You probably already know a bit about interest rates: lower is better. But, you can't necessarily control what the market is doing at the time you're ready to buy your home. To save money, compare interest rates across lenders, and look for ones that will charge lower fees (for appraisals, origination, and so on). Pay attention to the loan term too: 30-year mortgages are the most popular in the US (because they give you so much time to pay back, and your monthly payments are lower), but if you'd like a lower interest rate, opting for a 15- or 20-year home loan is the way to go - if you can swing the higher monthly payments every single month.
Once you're ready to apply for a home loan, what can you expect from the process? Many lenders offer a pre-qualification process: it'll tell you how much you can borrow, and it's a great way to show sellers that you're able to afford their asking price or the amount that you're offering. Be aware of whether or not prequalifying will affect your credit score, because that score impacts how much you can borrow.
If you already know which home you're buying, you'll complete a full application (including a hard pull on your credit). Your application then goes into processing and underwriting: verifying your income and credit, appraising the property you're buying, and making the final decision on whether or not to offer you a mortgage. When the lender approves your application, congrats. You'll move to closing, where you sign the paperwork, your home loan is funded, and you're officially a homeowner.
One of the smartest things you can do is shop around online for the right lender. Why? Because not all lenders are created equal. Each one might offer different interest rates, fees, and terms, which can have a big impact on your monthly payments and the overall cost of your loan. When you compare lenders, you're in control, giving yourself the best chance to find a mortgage that fits your budget and long-term financial goals. Plus, it's almost always going to be more competitive than anything your local bank might offer.
So, now that you're convinced that it's time to look for a home loan online, what criteria can you use to make your choice? Keep these in mind:
To help you on your homeownership journey, the experts at Top Consumer Reviews have researched and ranked some of today's most popular online home loan providers. By taking the time to shop around and compare, you'll find a mortgage that's not just good enough but the best fit for you. There's no place like home!
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