The median home value in North Dakota is $193,900, a good deal lower than the national median of $269,039. While it hasn’t broken into the top ten cheapest states for homes, property prices in the state are nevertheless more affordable than in many others. To help you save even more on your North Dakota home, you need to get the best mortgage rates as well.
If you’re looking for the best North Dakota mortgage lenders, you’re in the right place. In this article, we present the three best mortgage lenders in North Dakota, plus our selection criteria!
Choosing A North Dakota Mortgage Lender
We consider five key criteria when making our top mortgage lender picks:
Mortgage Products Offered
There are a wide variety of mortgage products being offered today. They fulfill different needs, so it’s important to choose a loan that can cater to your needs.
To make it easier for you to choose, here are some of the most popular loan types explained.
Conforming mortgage: Any loan that falls under state lending limits is a conforming mortgage. For North Dakota, loan amounts are capped at $548,250.
Jumbo mortgage: You can opt for a jumbo loan if you want to buy homes priced above lending limits. Jumbos allow you to get higher loan amounts with the tradeoff of higher interest rates.
Fixed-rate mortgage: Fixed-rate mortgages offer static interest rates for their entire loan duration. Their stability makes them popular among new homebuyers.
Adjustable-rate mortgage (ARM): Rates on an adjustable mortgage change annually based on market conditions. ARMs typically offer a period of fixed rates for the first three to ten years.
Government mortgage: Government mortgage products come from three organizations: the Federal Housing Administration, the Department of Veterans Affairs, and the U.S. Department of Agriculture. These loan products typically offer lower down payment requirements and more affordable rates to eligible borrowers.
Mortgage refinance (refi): Refinancing a loan means taking out a new mortgage to pay off your current one. People usually refinance to save money by getting lower rates or changing loan terms.
Home equity lines of credit (HELOC): This type of home equity loan provides you with a source of funds with your home as collateral.
Since North Dakota mortgage rates can vary based on many factors out of the lender’s control, it isn’t a consistent measure of affordability. Instead, we examine how easy it is to qualify for a lender’s loan offerings based on four metrics:
Minimum credit score: Lenders use FICO credit scores to determine whether you qualify for a mortgage. 620 is the minimum required by most lenders, but others may reduce the minimum score to make their loan offerings more affordable. If you have no or bad credit, look into lenders that consider non-traditional payment history (e.g. utility bills).
Minimum down payment: Most lenders require you to make a 20% down payment to qualify. However, some loan programs allow you to qualify with at least 3% down but require you to take private mortgage insurance.
Closing costs: You usually need to pay a closing cost worth 5% of your loan at the end of the lending process. While you can pay them upon closing, some lenders can roll them into your interest payments – reducing your initial cash expenses.
Homebuyer assistance programs: Most U.S. states offer assistance to homebuyers through their respective housing authorities. They usually come as closing cost grants or down payment assistance programs aimed at first-time and repeat homeowners. Many of these programs may require you to complete a homebuyer education course.
The best lenders make applications a breeze for their borrowers. We examine the convenience of a lender’s application process through three metrics:
Online capabilities: Many lenders offer their consumers a way to apply for home loans online. This is especially important to people who can’t visit a lender branch to consult with home loan officers and mortgage brokers.
Online rate transparency: Rate estimates are crucial for consumers who want to rate shop and research between lenders. You may find rate estimates displayed on a lender’s website, but some lenders may require you to ask a loan officer for estimates. However, most rate estimates are based on general assumptions – you need to supply financial information for a more accurate quote.
Length of the application process: In most cases, your mortgage can close within weeks. However, there could be issues in the process that make your loan take longer to finalize. Ask your loan officer about their company’s closing times so you can plan your house hunt around it.
Customer Service And Ratings
You’ll be spending a lot of money on your home purchase, so you’ll need an equal housing lender with good customer service that’ll be there for you when a problem arises. We measure the quality of customer services provided by lenders with data from two organizations: the Better Business Bureau (BBB) and J.D. Power.
The BBB is responsible for rating the trustworthiness of companies with a letter grade that ranges from A+ to F. It analyzes factors like the company’s handling of complaints and business transparency to come up with the ratings.
J.D. Power rates companies based on customer satisfaction. It does so with customer surveys and ranks the top-performing companies in an annual study.
Access To Lender
Access to a lender’s services is crucial. If a lender doesn’t originate purchase loans in your state, then you can’t take advantage of its services and have to search for another one.
Another metric in this criterion is the number of branches a lender operates. Good branch coverage across multiple states helps borrowers who prefer applying for mortgages at a branch location.
The Best North Dakota Mortgage Lenders
If you’re looking for a mortgage lender in North Dakota, we recommend these three companies. Each lender specializes in one aspect of the lending process, so identify your needs and choose the one that can best fulfill them.
Here are some essential key facts before we cover the lenders in detail:
Variety of financial products
Conventional purchase loan
Home equity loan products
Minimum FICO credit score
Minimum down payment
BBB rating (A+ to F)
JD Power rating (out of 1000)
1. Fairway Independent - Best Home Loan Selection
Fairway’s greatest advantage is its selection of loan products. In addition to a complete suite of conventional and government loans, it also offers renovation and home equity loan products. You can also opt for a jumbo if you’re looking for higher loan amounts.
Fairway works with housing agencies in several states and can help you get closing costs and down payment assistance. However, there is one caveat to the services provided by Fairway: it doesn’t show rate estimates online, meaning you need to speak to a loan officer to get an estimate.
Lender availability: This equal housing lender offers mortgage products to customers nationwide through its online platforms and 700 branch offices.
2. Rocket Mortgage - Best Online Lender
This online lending arm owned by Quicken Loans boasts an easily understandable fully online lending experience to its consumers. With instructional videos and an easy way to connect with loan officers, Rocket promises that applications can be completed within half an hour.
However, Rocket’s services are exclusively online, so it might not be the best option if you prefer in-person conversations with a loan officer.
Lender availability: Rocket Mortgage is licensed to originate mortgages nationwide through its online platforms.
3. Veterans United - Best VA Lender
Veterans United is America’s top VA lender, responsible for over $175 million in VA loans throughout 2019. However, Veterans United doesn’t just serve VA loans – it also offers refinancing and a proprietary energy-efficient mortgage, which gives its borrowers extra money to pay for green home improvements.
Lender availability: Veterans United is licensed to offer mortgages nationwide and operates branches in 18 states.
North Dakota’s relatively low home prices mean you’re likely to find better deals on home listings. Once you find one, you need to find a good mortgage lender to capitalize on those deals.
If you’re looking for more information and advice along the path to homeownership in North Dakota, Wesley Mortgage, LLC is here for you! Our team is ready to guide you through the mortgage lending process and help realize your dream North Dakota home!