Best mortgage lenders with no origination fee in 2024
Published on January 04, 2024
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4 min read
When shopping around for a mortgage, you’ll find that many mortgage lenders charge an origination fee, which is the cost to cover processing and underwriting the loan. You’ll also find that some lenders don’t have this fee at all, or can discount or waive it for certain customers. Here is Bankrate’s guide to the best mortgage lenders with no origination fee in 2024.
Best mortgage lenders with no origination fee
Lender | Credit requirements | Down payment minimum | Bankrate Score |
---|---|---|---|
First Mortgage Direct | 620 for conventional loans, 580 for FHA and VA loans | 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans | 4.8 |
PenFed Credit Union | 650 for conventional loans, 700 for jumbo loans, 620 for FHA loans | 3% for conventional loans, 3.5% for FHA loans, none for VA loans | 4.7 |
Better | 620 for conventional loans, 580 for FHA loans | 3% for conventional loans, 3.5% for FHA loans, none for VA loans | 4.6 |
Alliant Credit Union | Undisclosed | 5% for conventional loans | 4.5 |
LowRates.com | 620 for conventional loans, 700 for jumbo loans, 580 for FHA loans, 500 for VA loans | 3.5% for FHA loans, none for VA and USDA loans | 3.7 |
Allied Mortgage Group | 620 for conventional loans, 700 for jumbo loans, 580 for FHA, VA and USDA loans | 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans | 3.5 |
Ally Bank | 620 for conventional loans, 700 for jumbo loans | 3% for conventional loans, 10.01% for jumbo loans | 3.5 |
Guild Mortgage | 620 for conventional loans, 680 for jumbo loans, 540 for FHA, VA and USDA loans | 3% for conventional loans, 3.5% for FHA loans, none for VA loans | 3.5 |
Homefinity | 620 for conventional loans, 600+ for FHA and VA loans | 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans | 3.5 |
First Mortgage Direct
Learn more
in our Bankrate review
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- Availability: All U.S. states
- Loans offered: Conventional, jumbo, FHA, VA, USDA
- Credit requirements: 620 for conventional loans, 580 for FHA loans and VA loans
- Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans
- Where to find: Online
PenFed Credit Union
Learn more
in our Bankrate review
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- Availability: All U.S. states
- Loans offered: Conventional, jumbo, FHA, VA
- Credit requirements: 650 for conventional loans, 700 for jumbo loans, 620 for FHA loans
- Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA loans
- Where to find: Branch locations and online
Better
Learn more
in our Bankrate review
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- Availability: All U.S. states
- Loans offered: Conventional, FHA, VA
- Credit requirements: 620 for conventional loans, 580 for FHA loans
- Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA loans
- Where to find: Online
Alliant Credit Union
Learn more
in our Bankrate review
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- Availability: All U.S. states except Hawaii, Maryland and New York
- Loans offered: Conventional, jumbo
- Credit requirements: Undisclosed
- Down payment minimum: 5% for conventional loans
- Where to find: Online
LowRates.com
Learn more
in our Bankrate review
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- Availability: All U.S. states except Georgia and Massachusetts
- Loans offered: Conventional, jumbo, FHA, VA, USDA
- Credit requirements: 620 for conventional loans, 700 for jumbo loans, 580 for FHA loans, 500 for VA loans
- Down payment minimum: 3.5% for FHA loans, none for VA and USDA loans
- Where to find: Online
Allied Mortgage Group
Learn more
in our Bankrate review
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- Availability: 34 states and Washington, D.C.
- Loans offered: Conventional, FHA, VA, USDA
- Credit requirements: 620 for conventional loans, 700 for jumbo loans, 580 for FHA, VA and USDA loans
- Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans
- Where to find: Branch locations and online
Ally Bank
Learn more
in our Bankrate review
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- Availability: All U.S. states
- Loans offered: Conventional, jumbo
- Credit requirements: 620 for conventional loans, 700 for jumbo loans
- Down payment minimum: 3% for conventional loans, 10.01% for jumbo loans
- Where to find: Online
Guild Mortgage
Learn more
in our Bankrate review
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- Availability: All U.S. states except New York
- Loans offered: Conventional, jumbo, FHA, VA USDA
- Credit requirements: 620 for conventional loans, 680 for jumbo loans, 540 for FHA, VA and USDA loans
- Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA loans
- Where to find: Branch locations and online
Homefinity
Learn more
in our Bankrate review
-
- Availability: All U.S. states except Nevada and New York
- Loans offered: Conventional, jumbo, FHA, VA, USDA
- Credit requirements: 620 for conventional loans, 600+ for FHA and VA loans
- Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans
- Where to find: Online
How to choose the best mortgage lender with no origination fee
While the best mortgage lender ultimately depends on individual circumstances and what feels “right” to you, it’s helpful to narrow down your options. Here are some tips:
- Set your priorities. Do you want to talk to a loan officer in person? Do you need a faster closing? Want to apply for and track your mortgage status through an app? Consider these and other questions as you come up with your short list of lenders.
- Get prequalified or preapproved. If you haven’t determined a homebuying budget, get prequalified for a mortgage first. This can help you understand how much a lender might allow you to borrow based on some preliminary financial information. If you’re ready to shop for homes, skip the prequalification and ask for a preapproval, which involves a credit check.
- Understand rate-lock fees. While the lender might not charge an origination fee, you might still need to pay to lock your interest rate as you look for homes. Clarify this cost, including any rate-lock extension fees, with each lender you’re considering.
Learn more:
Compare current mortgage rates
FAQ
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An origination fee is an upfront fee a mortgage lender charges to cover the cost of initiating and processing a loan. This one-time fee compensates the lender for services such as gathering the borrower’s information to process and fund the loan, and sometimes handling the escrow account as well.
Some lenders also include the cost of underwriting — the risk assessment the lender does for every borrower — in the origination fee, while others charge a separate processing or underwriting fee.
Origination fees exist for many types of loans, including mortgages and personal loans.
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Mortgage origination fees are typically based on a percentage of your home loan. In general, you’ll pay anywhere from 0.5 percent to 1 percent. If you were to take out a $350,000 loan, the origination fee could set you back $1,750 to $3,500.
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You might be able to negotiate the origination fee by simply asking the lender to reduce the cost or waive it, especially if you’re a strong borrower with good credit. This might also be an option if you’re obtaining a loan from a bank or credit union that you already have a relationship with.
Another way to get out of paying the origination fee is to ask the home seller to cover it — although this tactic typically only works in a buyer’s market, when sellers have fewer offers to choose from, or if the seller needs to move quickly or has had a hard time unloading the property.
Some lenders also offer no-closing-cost mortgages, which include the cost of the origination fee in the loan itself. This can be a good route to take if you don’t have a lot of cash available for closing costs upfront, but be aware: You’ll pay more for your loan overall.
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To determine the best no-fee mortgage lenders, Bankrate periodically evaluates more than 80 lenders for factors relating to affordability, availability and borrower experience, assigning each a Bankrate Score out of five stars. The best no-fee mortgage lenders generally have a Bankrate Score of 3.5 stars or higher. Learn more about our methodology.
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