Mortgage Lender Review Methodology

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Mortgage Lender Review Methodology

There are many different mortgage lenders from which to pick if you’re wanting to purchase or refinance a property. Although they provide numerous comparable items, each one’s specifics vary somewhat. How can you locate the ideal match for you?

We investigated the key characteristics of the top 45 mortgage lenders in the nation to help you reduce the field. Each one received a score between 0 and 5, using the following technique.

Our Review Processs

We considered the following key categories and their corresponding weights in order to properly evaluate companies:

  1. Quality of Service: 55%
  2. Operational Features: 27%
  3. Types of Loans Offered: 12%
  4. Accessibility: 6%

Companies were scored using a range of factors in each area, such as whether they provide online applications, how many states they are authorized to issue mortgages in, and whether or not they provide loans like jumbo and FHA, on a scale of 0 to 5. To get an average score for each firm, the weights assigned to each criteria were added together.

Data Collection

With over 1,200 unique data points and information from the NMLS, HDMA, and Scotsman databases, we gathered data on 45 mortgage lenders. In order to learn more about customer satisfaction, loan amounts, interest rates, and mortgage terms, among other things, a survey of 1,195 mortgage customers was undertaken. In order to learn more about the firm’s coverage, we also contacted corporate personnel.

Quality of Service

We looked at the following service quality standards and their corresponding weights:

  • Customer satisfaction overall: 42.50%
  • Benefits and grants: 5%
  • Online application: 5%
  • Online application support: 2.50%

Customers that get higher-quality service from businesses received higher scores; in all, quality of service variables accounted for 55% of the final score.

Overall Customer Experience

We surveyed mortgage borrowers on their interactions with mortgage lenders, and each lender was given a score between 0 and 10. This factor accounted for 42.50% of the overall score since obtaining a mortgage is a significant and possibly stressful life event.

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Benefits and Grants

For new and first-time homeowners, several lenders provide specialized programs like Home Possible and HomeReady loans. For this criteria, which made up 5% of the final score, we assigned organizations a score of 1 if they give perks and grants and a score of 0 if they don’t.

Online Application

Today, having a simple internet application is crucial. We evaluated businesses based on whether or not they provide this functionality; this aspect contributed 5% to the final score.

Application Assistance Online

The top lenders provide applicants with online assistance, such as support from a loan officer through chat, since mortgage applications are complex and may be perplexing. If a company does not provide online application support, we gave them a score of 0, and if they do, we gave them a score of 1. This component made up 2.5% of the overall score.

Operational Features

We looked into the operational aspects and weights listed below:

  • State licensing: 12%
  • Number of loan officers: 5%
  • Number of loan originators: 5%
  • Brick-and-mortar branches: 5%

Generally speaking, businesses with a larger reach and more loan officers and originators performed better. Operational aspects together made for 27% of the final score.

State Licensing

The more states in which a business is authorized to provide loans, the more readily accessible it will be to the typical client. The number of states in which a company has a license to lend was graded on a scale from 0 to 1; this criteria accounted for 12% of the final score.

Number of Loan Officers

It’s crucial to have access to loan officers since most lenders demand you to collaborate with one of them when completing your mortgage application. A lender’s officer roster is subject to frequent fluctuation. The number of loan officers at each company was graded on a scale from 0 to 1, and this component made up 5% of the final score.

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Number of Loan Originators

Mortgage originators are also crucial to the process. The number of loan originators at each company was rated on a scale of 0 to 1; this factor made up 5% of the final score.

Brick-and-Mortar Branches

The more active brick-and-mortar branch locations a company has, the better; the more branches, the lower the score. This element contributed 5% to the final score.

Types of Loans Offered

We looked at whether lenders provide the following loan categories, along with the corresponding weights:

  • Jumbo loans that don’t comply: 4.5%
  • FHA loans: 2.5%
  • VA loans: 2.5%
  • Adjustable rate loans: 2.5%

The availability of various loan kinds comprised 12% of the overall score.

Non-Conforming Jumbo Loans

Jumbo loans are ones that surpass the Federal Housing Finance Agency’s maximum loan amounts (FHFA).If a company does not provide jumbo loans, we gave them a score of 0, and if they do, we gave them a score of 1. This factor made up 4.5% of the final score.

FHA Loans

FHA loans are a little bit simpler to get due to their more relaxed restrictions. If a company does not provide FHA loans, we gave them a score of 0, and if they do, we gave them a score of 1. 2.5% of the final score came from this component.

VA Loans

For qualified military members, veterans, and their families, the U.S. Department of Veterans Affairs offers VA loans. If a company does not provide VA loans, we gave them a score of 0, and if they do, we gave them a score of 1. This element made up 2.5% of the overall score.

Adjustable Rate Loans

In contrast to a fixed-rate mortgage, an adjustable-rate mortgage’s interest rate may change over time. If a company does not provide adjustable rate mortgages, we gave them a score of 0, and if they do, we gave them a score of 1. This element made up 2.5% of the overall score.

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Accessibility

The following characteristics associated with mortgage loan accessibility were looked at, along with the corresponding weights:

  • Days to closing: 5%
  • Debt-to-income ratio: 1%

The higher the points, which collectively accounted for 6% of the total score, the more accessible the lender was.

Days to Closing

It might be problematic if it takes too long since your rate lock can expire. Some mortgage lenders can take a lot longer than others to finalize a deal. On a scale of 0 to 1, we assigned organizations a score based on how long it typically takes them to finalize a mortgage; this element contributed 5% to the overall score.

Debt-to-Income Ratio

The percentage of your monthly income that is used to pay down your debts is referred to as your debt-to-income ratio. Although they often follow a similar pattern, DTI ratio requirements may vary amongst lenders. Based on the lowest DTI ratio necessary to qualify for conventional loans, we gave organizations a score; those with lower DTI criteria received better scores. This element contributed 1% to the final score.

Choosing the Best Mortgage Lender for You

Comparing mortgage lenders may be challenging, particularly because it is sometimes difficult to get crucial information regarding prospective rates and costs. You must typically complete the application process and get pre-qualified in order to see your rates, however this is not always the case.

Our evaluations and roundups aim to provide you the most recent information about the top mortgage lenders in the market right now. Here are the outcomes of our methodology:

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