Finding the right mortgage lender is a crucial step in the home-buying journey. After all, your mortgage will likely be one of the biggest financial commitments you’ll ever make, so it’s important to choose a lender that offers competitive rates, favorable terms, and excellent service.

While shopping around for a mortgage may seem overwhelming, it’s definitely worth the effort. Fortunately, you don’t have to visit multiple banks or credit unions in person anymore. With so much information available online, it’s easier than ever to compare mortgage rates and loan costs—whether you're buying your first home or refinancing your current one.

But where do you begin? What should you look for? In this guide, we’ll walk you through the key steps to take when shopping for a mortgage and what to consider when comparing loan offers.

1. Check your credit score and report.

Credit history and credit score play a major role in your eligibility to qualify for a mortgage and the interest rate you’ll receive.

That’s why it’s a smart move to check your credit report early in the home-buying process. Doing so gives you an idea of where you stand, whether you’re likely to qualify for a loan, and if you’re in a strong position to secure better rates. It also gives you time to dispute any errors and improve your score before applying.

You can request a free copy of your credit report from Experian, TransUnion, or Equifax through AnnualCreditReport.com.

In general, a conventional mortgage loan requires a credit score of at least 620, while FHA loans accept at least 580. But don’t just aim for the minimum—higher scores can open the door to more lenders and better offers.

If your score needs work, you can improve it by paying bills on time, reducing outstanding debt (especially high-interest credit cards), and keeping credit utilization low. These strategic improvements can make a big difference in the long run.

2. Decide what type of mortgage is for you.

Mortgage loans come in different forms, terms, and rate types. Knowing which option aligns with your financial situation, long-term goals, and personal preferences will make shopping for a mortgage much easier.

Take time to explore your options now, so you can make a wise decision when you find your dream home.

Start by exploring the different types of loans available to you. There are three major categories: conventional loans, government-backed loans, and jumbo loans. Depending on your situation, you may qualify for one or multiple options.

Compare different loan types

Loan Types	Features
Conventional loans	Serviced by private lenders like banks or credit unions
	Requires good credit score, steady income, and solid financial profile
Government-backed loans	FHA: Low down payment, low credit requirement
	VA: For US service members, veterans, or surviving spouses
	USDA: Low-income buyers in certain suburban and rural areas
Jumbo loans	Used for loan amounts that exceed conforming loan limits set by Fannie Mae and Freddie Mac
	Requires a high credit score and large down payment

Next, determine the right loan term for you. Your loan term affects your monthly payment and how much you’ll pay in interest over time. Consider how long you plan to stay in the home, your budget, and your long-term financial goals.

Compare your loan-term options

Short-term loan (e.g. 15 years)	Long-term loan (e.g. 30 years)
🔴 Higher monthly payments	🟢 Lower monthly payments
🟢 Typically lower interest rates	🔴 Typically higher interest rates
🟢 Lower overall cost	🔴 Higher overall cost

Another key factor to consider is the type of interest rate on your mortgage. There are two main options: fixed-rate and adjustable-rate. With a fixed-rate mortgage, your monthly principal and interest payment stay the same for the entire life of the loan. An adjustable-rate mortgage (ARM), on the other hand, starts with a lower fixed rate for a set period, then adjusts periodically based on market conditions.

Compare your interest rate options

Fixed-rate	Adjustable-rate
🟢 Lower risk, predictable monthly payments	🔴 Higher risk and uncertainty
🔴 Higher interest rate	🟢 Lower introductory rate

Weigh your options carefully and choose the type of mortgage that is best for you. Having a clear picture of what fits your budget and needs will help you have more productive conversations with lenders and ultimately secure the best possible deal.

3. Gather the required financial documents.

Once you’ve decided on the type of mortgage that fits your needs, it’s time to get your documents ready. This part of the process takes time, so it’s best to get some of the work done early. Having your paperwork ready helps lenders provide accurate quotes and speeds up your mortgage loan approval process.

While the exact requirements may vary by lender, here are the documents you’ll likely need:

Recent pay stubs covering the last 30 days or job offer letter
W-2 forms from the past two years
Signed federal tax returns from the past two years
Proof of additional income (e.g., Social Security, alimony, rental income)
Profit-and-loss statement and tax returns for your business, if applicable
Two most recent bank statements
Statements for existing loans or bills
Investment account statements (brokerage, retirement, etc.)
Proof of identity (e.g., driver’s license or passport)
Social Security number
Gift letters, if someone is gifting you funds for your home purchase
Certificate of housing counseling or homebuyer education (if applicable)

4. Research and contact lenders or brokers.

When shopping for a mortgage, it’s important to contact several mortgage lenders to better compare your options. Each lender may offer different loan programs, terms, interest rates, and closing costs.

Here are a few ways to start your search:

Use an online comparison site. Online platforms like Refinance.com make it easy to compare mortgage lenders. Simply enter your information, and you’ll get a list of lenders in your area with respective loan quotes. From there, you can compare rates, shortlist lenders that meet your needs, and request pre-approval. Our lenders on the platform will safeguard your information and respect your communication preferences.
Contact mortgage brokers. If you don’t want the hassle, consider working with a mortgage broker. These skilled professionals connect you with appropriate mortgage lenders, help you find the best deals, and guide you through the application process. While their service may come with a fee, the convenience and expertise they offer can be well worth it.
Reach out to lenders directly. You can also contact banks, credit unions, or other financial institutions directly to request loan quotes. Speaking with a loan officer can give you personalized insights into what you qualify for. Just note that this approach may require more time and effort on your part.

Pro tip: Don’t rush the decision. Contact at least three to five lenders and compare all aspects of their offers—including rates, fees, and service—before choosing who to work with.

5. Compare loan estimates, rates, and fees.

Once you’ve been pre-approved for mortgage loans from several lenders, start reviewing the loan estimates and compare your options carefully. While the mortgage rate is an important factor, it's just one part of the bigger picture. Be sure to also consider lender fees, discount points, closing costs, and the overall experience during the pre-approval process—this can give you valuable insight into each lender’s responsiveness and efficiency.

Here are the things to review when comparing loan estimates:

Loan details. Confirm the loan term, purpose, product type, and whether the loan matches what you discussed.
Loan amount. Make sure it aligns to what you’re expecting.
Monthly payments. Review the breakdown of principal and interest payments.
Escrow items. Check if property taxes, homeowners insurance, or other costs are bundled into your monthly payment.
Total monthly mortgage payment. Understand what you’ll actually be paying each month.
Closing costs. Look closely at origination fees, application fees, underwriting charges, and other upfront costs.
Lender credits or points. Verify any credits or rate-buydown points that were discussed.
Cash to close. Understand how much cash on hand you’ll need, including your down payment, deposits, fees, and any other required funds.
Other considerations. Review loan assumptions, late payment policies, appraisal requirements, refinancing, and servicing details.

By reviewing each loan estimate and comparing them side by side, you can find the ideal balance of loan term, rate, and costs that fit your goals. And if ever one lender offers better terms than another, don’t be afraid to negotiate—having a stronger offer in hand can often lead to better deals.

If you’ve decided on an offer, notify your lender so they can begin processing your application. Also consider locking in your mortgage rate if you haven’t yet to protect you from potential increases before your closing date.

Key Takeaway

Choosing the right mortgage lender goes beyond scoring the best mortgage rates—it’s about finding a trusted partner who understands your financial situation, offers suitable loan products, and provides reliable service throughout your home buying journey.

Yes, mortgage shopping takes time, but the right loan can save you thousands overtime. If you’re planning to buy a home soon, the best thing you can do is start preparing early. Begin by reviewing your credit report and working on your credit score if needed. Explore your loan options to understand what type of mortgage suits your financial situation.

It’s also best to start gathering your financial documents ahead of time as they are essential for pre-approval and final approval. Take your time researching and comparing lenders as well. Look at loan estimates side by side, ask questions, and don’t hesitate to negotiate.

A mortgage is one of the biggest commitments you'll make. Rushing through the process could lead to long-term regrets, while a well-informed decision can set you up for financial success.