LenderFi Mortgage Review: Lender With a Special Low-Rate Promise

LenderFi Mortgage is perfect for mortgage borrowers who understand what they're looking for and are ready to compare costs. LenderFi is also a great first stop for applicants who are in their comfort zone with digital financial products. This mortgage lender offers low-cost home loans along with plenty of transparency. The only downside is that you can't get every type of mortgage here. Read our full LenderFi mortgage review to find out if this is the best mortgage lender for you.

This mortgage lender is a good fit for: Any borrower who wants the peace of mind that comes with knowing they have the lowest possible interest rate on their home loan. LenderFi is also great for someone who prefers a mortgage that probably won't be transferred to an unknown servicer in the future.

Top perks

Low rates and fees

LenderFi offers low-cost mortgages. Besides very low mortgage rates, there is no application fee or origination fee. You can choose to pay for mortgage discount points if you want to lower your rate even further, but you can also choose to take a higher interest rate and let LenderFi pay you. That's called a lender credit and it's a great way to cover your closing costs with potentially no money out of your own pocket.

Free rate insurance

LenderFi offers a unique guarantee regarding interest rates. If mortgage rates fall at least a quarter of a percent below your rate, LenderFi will refinance your mortgage to lower your interest rate at no cost to you. This benefit is available once every six months for as long as you have a LenderFi mortgage.

Easy to check rates online

LenderFi publishes mortgage interest rates on its website, and they are easy to find. Even better, every rate search brings up multiple rate options based on whether you pay for discount points or take a higher rate in exchange for a mortgage lender credit. You can also play around with the down payment amount and credit score to see how those might affect your mortgage rate. This information is very useful to anyone who is researching mortgages, costs, and qualification criteria.

Easy and quick mortgage pre-approval

LenderFi offers convenient technology right from the beginning of the process. You can easily apply on the website, and some borrowers will have their pre-approval in hand within 15 minutes.

Low-down-payment mortgages

LenderFi offers Fannie Mae and Freddie Mac home loans, which have more flexible down payment requirements than most conventional loans. Some examples of the mortgage options that require only 3% down are:

• The Fannie Mae HomeReady mortgage: For low- and moderate-income borrowers with a 620 credit score
• The Fannie Mae Conventional 97 loan and the Freddie Mac HomeOne mortgage: For first-time home buyers (you can't have owned property within the past three years)
• The Freddie Mac Home Possible mortgage: For low- and very-low-income borrowers with a 660 credit score

Services loans

LenderFi is a loan servicer as well as a loan originator. This might be important to you, especially if you've ever had to suddenly start making your mortgage payments to a new company that you were previously unfamiliar with. Many people experience problems during the transition to a new servicer and don't appreciate having their choice taken away. LenderFi doesn't promise to service 100% of its loans, but there's a good chance your loan won't move to a different company.

What could be improved

Limited selection of nontraditional mortgages

LenderFi offers conventional loans and government-backed loans, but it doesn't offer mortgages to meet the needs of borrowers who need a nontraditional mortgage. For example, there is no bank statement loan for borrowers who are self-employed and need to qualify for a mortgage based on cash flow and not on tax returns.

No home equity loan or home equity line of credit

LenderFi doesn't offer home equity products. If you want to access your equity, your only option at LenderFi would be a cash-out refinance mortgage.

To get a mortgage with LenderFi, you'll need to be located in a state LenderFi serves. LenderFi is available almost nationwide, but not quite. You can currently apply anywhere except Hawaii, Missouri, Nevada, or Utah.

LenderFi requires a credit score of 680. Also, your debt-to-income ratio (DTI) should be below 43%.

Your DTI is the percentage of your income that goes to required debt payments each month, including your proposed new housing payment. Depending on your circumstances, LenderFi might be able to approve you with a DTI higher than 43%. When lenders offer flexibility on DTI, they usually want to see a stronger showing in other areas of your application, such as a higher credit score and/or a bigger down payment.

Most borrowers will need some cash. If you are eligible for a VA loan, there is no down payment requirement. Everyone else will need at least 3% of the purchase price. Borrowers will also need to cover closing costs, but some will be able to cover those with a lender credit by taking a higher interest rate on their mortgage.

LenderFi's refinance rates are very competitive. They are right on par with national average rates. Even better, you can get a great rate at LenderFi for a very low price.

Most mortgage lenders allow you to buy down your interest rate by purchasing mortgage discount points. A mortgage discount point is prepaid interest that you pay up front in exchange for a lower interest rate for the life of the loan. The cost of one point is 1% of your loan amount, and for that fee, you will typically get between one-eighth and one-fourth of 1% off your mortgage interest .

LenderFi charges less for mortgage discount points than most other lenders.

LenderFi's mortgage rates trend lower than the national average. When we checked, the LenderFi rate closest to the national average was available for zero points, whereas the average lender charges between a half point and one point.

LenderFi is a great choice for digital consumers and well-qualified price shoppers. If you're comfortable navigating the mortgage process online or on your smartphone, you'll enjoy the process at LenderFi. If you are confident in your ability to qualify for the loan you want and you have the luxury of shopping for your home loan based only on cost, LenderFi's rate insurance could give you a long-term financial advantage.