Best mortgage lenders in California in 2021

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Patricia Marroquin/Getty Images/Illustration by Bankrate

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If you want to buy a home in The Golden State, you’re going to need a lot of gold. The median sales price of a home in California as of April 2021 was $700,000, a 30 percent jump versus the same time last year, according to data from real estate brokerage Redfin. Whether you want to live alongside a vineyard in Sonoma or wake up next to the best surfing spot in Santa Cruz, owning a piece of California means you’ll probably need to borrow some money.

You shouldn’t just borrow that cash from the first mortgage lender you find, though. It’s crucial to compare mortgage lenders in California to find an option that’ll help lower your costs — and stress — on the road to closing.


Methodology

To determine the best mortgage lenders by state, Bankrate evaluated lenders based on several criteria, including affordability (APR and fees); expediency (approval and closing times); and experience (including customer service support). In general, the best mortgage lenders have a high Bankrate Score and high ratings from borrowers.


Best mortgage lenders in California

Better.com

Better.com (also known as Better Mortgage) earned the highest marks of the California mortgage lenders Bankrate reviewed due to quick turnaround times and lack of fees. The lender issues preapproval letters — a key piece to help empower you in the buying process — within three minutes, and it speeds to closing in 21 days, much faster than the typical 30- to 45-day range. If you’re looking for a VA or USDA loan, though, you’ll need to look elsewhere; Better.com only offers conventional and FHA mortgages at this time.

Optimum First Mortgage

Optimum First Mortgage has originated more than 20,000 loans, and in most of those cases, the lender didn’t charge an origination fee. Another key benefit is the lender’s Lifetime Rate Protection Guarantee: If you obtain your mortgage with the lender, you can refinance it if mortgage rates in California improve with no closing costs. Optimum First has a stellar track record with borrowers, too: Ninety-nine percent say they’d recommend the lender to others.

LowRates.com

LowRates.com is owned and operated by Sun West Mortgage. Although the lender charges a $1,495 origination fee, it also offers down payment assistance to eligible borrowers. The biggest perk here is timing: The lender can get to closing in as little as 20 days. If you’re looking to buy a home in California, this might be the route to moving into that new pad even faster.

Homefinity

Last year, Homefinity — an affiliate of Fairway Independent Mortgage Corporation — closed nearly $2 billion in loans, so you’ll be getting a very experienced team to help with your mortgage in California. That experience helps the lender work quickly, too: Underwriting takes less than 72 hours, and most loans are closed within 30 days. The lender has also earned rave reviews from borrowers, with 98 percent saying they’d recommend Homefinity to others.

Navy Federal Credit Union

If you’re a member of the military, Navy Federal Credit Union can be a worthwhile option for a home loan. Members of the credit union can take advantage of no loan processing or underwriting fees and earn cash back if they work with one of the credit union’s real estate agent partners. Navy Federal Credit Union boasts plenty of useful features for other personal finance needs, too, with surcharge-free ATM access at 7-Eleven locations  and in-person services available at partner credit unions throughout the state.

First Mortgage Direct

If you’re buying a home in California, you’re in luck: You’re one of the borrowers who can use First Mortgage Direct, which is only available in 17 states. The online lending division of First Mortgage Solutions doesn’t charge origination fees, and doesn’t offer any special, limited-time offers, either, so if you’re browsing for a loan, you won’t feel pressured to commit without first comparing your options.

California conforming loan limits

When you borrow money to buy a home, you can’t dip into a bottomless pit. Your budget might need to be under a certain threshold based on the type of loan you apply for in California. These are called conforming loan limits, and they come in two varieties: conventional limits, which are set by the Federal Housing Finance Agency; and FHA limits, which are in place for all FHA borrowers. These limits are much higher in certain places in California than the standard limits for the rest of the country — as high as $822,375 in San Francisco and Los Angeles. Bankrate’s county-by-county directory of conforming loan limits in California can help you determine how much you might be able to borrow.

California first-time homebuyer programs

First-time homebuyers — or those who haven’t owned a home in the last three years — could be eligible for one of the first-time homebuyer programs through the California Housing Finance Agency. To qualify, you’ll need to meet certain eligibility requirements related to credit score, debt-to-income ratio and income and purchase price limits. If you do, you can take advantage of low-interest rate loan programs and down payment and closing cost assistance.

How to find the best mortgage lender

Finding the best mortgage lender for you ultimately comes down to your individual needs and preferences. Consider what you want out of the homebuying process: Do you want a super-fast closing, or are you okay with taking some extra time? Do you want to be able to talk to a representative in-person, or are you comfortable with doing everything online? Do you need help with closing costs, or are you sitting on plenty of cash to cover those final expenses?

In addition to considering your budget, think about what you can do to make your financial picture look appealing to the best mortgage lenders. Identify any potential opportunities to improve your credit, save more money for a bigger down payment and shop around to make sure you can get the best rate possible on a home loan.

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Written by
David McMillin
Contributing writer
David McMillin writes about credit cards, mortgages, banking, taxes and travel. David's goal is to help readers figure out how to save more and stress less.
Edited by
Mortgage editor