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Rate is a nationwide mortgage lender with an easy-to-use website and competitive rates on home loans. Rate helps remove some of the obstacles to homeownership by offering flexible loan programs designed to accommodate people with less-than-perfect credit, and those who need to make a smaller down payment. Also, Rate's mortgage application technology is robust and user-friendly, which makes it easy to apply and manage your application all the way through to closing.
Check out our full Rate review to decide whether this is the right mortgage lender for your next home loan.
Best for: Down payment assistance
Rate
Bottom Line
Rate does a great job with ease of usability, offering comprehensive loan information during your research phase, plus the option to securely upload and digitally sign loan documents when you're ready to apply. The lender publishes its rates for different loans online, making it easy to compare options.
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Adjustable Rate Terms
It's important to consider multiple mortgage lenders to find a good fit for you. We've listed one of our favorite lenders below so you can compare your options:
| Lender | Min. Down Payment | Credit Score | Next Steps |
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4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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This lender is a good fit for: Rate shoppers doing preliminary research before talking with a loan officer. Rate also helps you research neighborhoods, an unusual feature for mortgage lender websites. It's also a great lender for borrowers looking into down payment assistance programs.
Rate's website is extremely customer-friendly -- it's easy to navigate and find information. In very few clicks, you can find out which loans and terms are available, what loan might be right for you, and what today's mortgage rates are.
Rate offers a helpful feature that not all mortgage lenders provide. On its mortgage rates page, you can see how much your loan will cost with zero discount points versus one or two discount points. A mortgage discount point is prepaid interest. You pay a fee upfront and the lender lowers the interest rate. A point usually costs 1% of your loan amount, and the discount is typically one-eighth to one-quarter of one percent off your mortgage rate. The discount lasts for the life of the loan on a fixed-rate mortgage, or until the first rate adjustment on an adjustable-rate mortgage. If you don't keep the loan for at least a few years, paying for mortgage discount points might not make sense.
Rate offers robust digital mortgage technology that can make the loan process easier and faster. Most loan documents can be signed online, and you can arrange to provide any required ink signatures in the location of your choice. Because so much can be completed in advance, the actual loan closing can be as brief as a few minutes.
Rate is also the Editors' Choice for Best Mortgage Lender App in 2022, an award issued by The Motley Fool's editorial team.
Rate participates in several low down payment programs designed to help borrowers get a home loan even if they can't make a 20% down payment. Those programs include:
If you're otherwise ready for homeownership, don't assume that a lower credit score will necessarily prevent it. Rate offers VA loans (for service members, veterans, and some surviving spouses) that require a minimum credit score as low as 550. The lender also offers FHA loans (for anyone) with a minimum credit score of 560.
Rate can help you learn more about the neighborhoods you're interested in. Click "Housing market research" from the dropdown menu on Rate's website to go to the "Know your neighborhood" page. Enter a ZIP code or city name to find out what letter grade the area earns. The website returns detailed results, including market trends, population trends, and school data that can help inform your home search.
If you buy a new-build home before it's built, you'll need to make two housing payments -- one for the new home and one for the place where you'll live during construction. A common solution for this is a construction-to-permanent loan, which Rate offers. During construction, you only have to make interest payments, and only on the amount that has been disbursed to the builder. When the home is complete, Rate converts the loan to a traditional mortgage, and then you will begin making full payments.
Rate has a division called Owning that offers extra low rates to qualified borrowers. If your credit score is at least 640, you're not self-employed, and you're not applying for a jumbo loan, you might be eligible for a streamlined mortgage with an interest rate that's 0.25% to 0.50% below the competition's rate.
Rate has many selling points and very few shortcomings. But these are two potential drawbacks we came across.
Guaranteed Rate has more options than are listed on its website. What this means is that (1) you might skip Rate, incorrectly thinking it doesn't offer what you want, and (2) you may have to talk to a loan officer to get all the information you seek. Doing that is virtually guaranteed to put you on a marketing list.
The last time we checked, Rate wasn't offering the USDA loan. But some of its brokers advertise it, so if you're looking for this program, it's best to call and ask.
While most borrowers can get pre-approved with a soft credit pull, Rate may require some borrowers to undergo a hard credit check. In those cases, borrowers are responsible for the fee.
You need a 620 FICO® Score for a conventional loan at Rate. For a jumbo loan, your credit score must be at least 660. You may qualify for a VA loan with a 550 credit score, or an FHA loan with a 560.
Like most mortgage lenders, Rate charges higher interest rates to people with lower credit scores. On a $250,000 loan, a rate of 7% versus 7.5% saves you more than $30,500 over the life of a 30-year loan. Follow our tips to improve your credit score before applying to help you qualify for a lower interest rate.
Your debt-to-income ratio (DTI) should be no higher than 43% for most loans, but if it is higher, Rate may have an alternative loan that's appropriate for you.
To calculate your DTI, divide your monthly debt obligations (such as credit card payments and car payments) by your monthly pretax income, then multiply by 100. If the number you get is over 43, you might need to pay off some debt or look at alternative loans.
Rate's refinance mortgage rates are competitive and are about the same as the national average. When we checked, Rate's refinance mortgage rate was a little lower than the purchase rate.
Rate's mortgage rates are not terribly different from the national average, sometimes a little higher, sometimes a little lower. If you are willing to pay for mortgage discount points, you could get an even lower rate. Points are prepaid interest. If you plan to keep the home for at least several years, you could save money by buying a lower interest rate. To purchase a home, FHA loans and VA loans have slightly lower interest rates than conventional mortgages.
You want digital convenience: Rate is a great choice for borrowers who want to conduct financial business online, including on mobile, from anywhere. Rate was an early pioneer in digital mortgage technology and remains at the front of the pack. The convenience factor is very high. And if you want the option to talk to someone in person, Rate has branches in most states and Washington, D.C.
Rate offers rates similar to the national average.
Yes. Rate has tools in place to help you get a mortgage, with pricing that compares well to other options.
Yes, Rate's rate for refinance loans is about the same as the national average.
You'll need a 620 credit score for a conventional loan and a higher score for a jumbo loan. If your score is lower, you might qualify for an FHA loan. If you're struggling to come up with a down payment, you can apply for financial assistance and a special loan program designed to help you become a homeowner.
Rate offers many types of mortgage loans, including:
Motley Fool Stock Disclosures
Kimberly Rotter has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Axos Financial, PNC Financial Services, and Target. The Motley Fool has a disclosure policy.
