The best FHA lenders offer a combination of excellent service, low rates, and flexible terms. Guaranteed Rate does just that. Your full online application process and streamlined document transfer and closing technology make the mortgage process a breeze.
While this company is known for making the mortgage process completely digital, it also has hundreds of offices across the country for homebuyers who prefer that personal touch. When it comes to getting the best deal, Guaranteed Rate has competitive rates and low lender fees. They also have a wide variety of term and down payment options to choose from with their FHA loans.
Compare the best FHA lenders
|Companies||Minimum Credit Score||Initial rate||conditions||Minimum deposit||Online application|
Best overall result
|620||2.625%||15 or 30 years||3.5%||Yes|
|Carrington Mortgage Mort
Best for bad credit
|500||Indefinite||15 or 30 years||3.5%||No|
|Rocket Mortgage from Quicken Loans
The best for real estate investors
|Caliber home loan
Best for new homebuyers
Best for customer service
How to Pick the Best FHA Lender
Selecting the best FHA lender is a personal process and there are a number of factors that should be considered before deciding where to get your FHA loan. Here’s what to look for:
- Required qualifications: The first step in narrowing down the best FHA lenders is to make sure you meet their credit and income requirements. While they may not make it public, all lenders have a minimum creditworthiness and debt-to-income ratio.
- Prices and fees: If you are looking for the best rates and lowest fees, FHA loans will save you money. In addition to interest rates, watch out for lender fees such as application fees, acquisition fees, creation fees, subscription fees, and evaluation fees.
- Application process: Do you want to do everything online without speaking to anyone, or do you prefer to work in person with a representative? Your answer will guide who you end up choosing for your FHA loan.
- Loan terms and amounts: You should know if you want a 15-year or 30-year mortgage and the approximate size of the loan. This way you can shut out any FHA lenders who don’t offer what you are looking for.
FHA Loans vs. USDA Loans
Both FHA loans and USDA loan are backed by government agencies and allow borrowers, including those with lower credit scores than lenders, to buy a home with a lower down payment and interest rate than they would normally qualify. However, they are not the same – USDA loans were created to help stimulate the housing market in rural areas, so you can only use them to buy a home in qualified areas. The following table shows some important differences.
|Credit type||FHA loans||USDA loan|
|Minimum Credit Score||580 (500 with a 10% deposit)||640 in most cases|
|Debt-Income Ratio||Less than 43% (50% with good creditworthiness)||41% in most cases|
|Income requirements||None||Cannot exceed 115% of the median income for your region|
|Credit limits||A minimum of $ 356,362, a maximum of $ 822,375, varies by region||None|
|Other requirements||The apartment must have been the main residence for at least one year||Must buy in a qualified rural area|
frequently asked Questions
Are FHA Loans Hard To Get?
FHA loans are easier to come by than traditional loans. They have lower creditworthiness requirements and more flexible income requirements.
What qualifications do FHA lenders generally need?
Most FHA lenders require you to have a credit rating of at least 580 for a 3.5% down payment loan or 500 with a 10% down payment, although some lenders require a 600 or 620 rating. FHA lenders also look at your creditworthiness in terms of debt-to-income ratio, or the portion of your gross income that goes towards your debt each month and which should generally stay below 43%. You can sometimes qualify with a DTI of up to 50% if you have good credit.
What is the Downside of Borrowing from an FHA Lender?
The main disadvantage of FHA loans is that they are Mortgage insurance. Even choosing the best FHA lenders can mean a few additional closing costs and higher monthly payments. Also, you can only get FHA loans for a primary residence so it is difficult to use them to buy an investment property. You must live in the property for at least the first 12 months.
We considered over a dozen different mortgage lenders offering FHA loans before narrowing this list down to the best FHA lenders. We checked the customer service, the prices and fees, the application process, the credit requirements and the variety of credit types offered.
After making our picks for the best FHA lenders, we used their terms, requirements, and mortgage processes to find lenders who specialize in everything from first-time buyers to investors to bad credit borrowers. Transparency was also important, so preference was given to lenders who published clear rates and terms.