Thinking about making the jump from renting your space to owning it? Our 30-year mortgage guide will help you learn more about mortgage rates and find the best mortgage loan for you. Remember, you’ll be looking at closing costs, monthly mortgage payments, property taxes, current mortgage interest rates and much more.
Best Mortgage Lenders for a 30-Year Loan
Let’s take a look at some of the best mortgage companies that offer 30-year loan options.
Best for A Variety of Options: New American Funding
New American Funding also offers jumbo loans, with loan amounts of up to $3 million. New American allows jumbo mortgagees to use a co-signer — someone who won’t be living in the home but who can sign on the loan to help a buyer qualify. When dealing with larger and more expensive homes, this can be a key feature if your debt-to-income ratio is not sufficient with other lenders.
The biggest advantage to New American today is its 5 Year Rate Protection Pledge. New American offers buyers the ability to refinance without lender and appraisal fees at any time in the next five years if their rates become more favorable, assuring its buyers get the best rate possible. If you’re concerned about locking into a high rate and would like the assurance that you will get the best deal in the future, check out New American’s loan offerings.
Why We Love It: With New American Funding’s generous loan amounts, approved customers have the advantage of increased flexibility when it comes to their shopping options. This unique lender not only provides access to larger loan amounts but also safeguards your interest rates, ensuring that you can make well-informed decisions without worrying about sudden rate changes.
Best for Self-Employed Borrowers: CrossCountry Mortgage
You might have a more difficult time finding a mortgage loan if you’re self-employed. Most lenders require you to submit proof of income, and that amount can fluctuate as business comes and goes.
CrossCountry Mortgage offers customized lending solutions for business owners, freelancers and other self-employed individuals. The company’s Asset Qualifier Program allows you to use the value of business assets you own to qualify for a mortgage. This can be especially beneficial for business owners who have devoted a large percentage of their income into assets to improve the value of their company. CrossCountry Mortgage can also help you find a loan with a credit score as low as 580 points and without employment or income documentation.
CrossCountry Mortgage is licensed to lend in California, Colorado, Connecticut, DC, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Virginia, and Washington.
Why We Love It: CrossCountry Mortgage offers a unique benefit of asset qualification, catering to individuals who prioritize investing over traditional saving methods. This feature is particularly advantageous for many Americans who have built up significant assets through investments and would like to leverage them for securing a mortgage. By utilizing this platform, you can collaborate with professionals to gather and present the necessary documentation that reflects your assets accurately, ultimately enabling you to qualify for a mortgage based on your investment portfolio.
Best for Flexible Mortgage Options: Angel Oak Mortgage Solutions
Angel Oak Mortgage Solutions offers standard financing options but mostly markets its services for non-qualified mortgage (QM) loans such as portfolio lending, investment loans and jumbo mortgages. With offerings for very well-qualified buyers with favorable terms, as well as a program for buyers with less than stellar credit, Angel Oak can provide you with a customized solution when buying a large or expensive home.
All of Angel Oak’s jumbo loan programs can be used for primary residences, second homes or investment properties. Angel Oak’s Gold Prime Jumbo Loan offers the most-qualified buyers up to a 50% debt-to-income ratio, a down payment as low as 10% and loan amounts of up to $3.5 million.
The Non-QM Platinum Jumbo loan allows buyers who have faced bankruptcy or foreclosure more than four years ago to obtain a jumbo loan and offers a one-year tax return program. With flexible options to meet your needs, Angel Oak can be a great option for jumbo mortgages.
Why We Love It: With Angel Oak Mortgage Solutions offering specialized jumbo loans, investors and affluent individuals have the opportunity to secure financing for their investments easily. Whether purchasing rental properties or expanding your investment portfolios, this platform provides the means to acquire funding tailored to your specific needs.
Best for Online Mortgages: Quicken Loans®
Quicken Loans should be your first stop if you’re looking for an easy way to get a mortgage online. As America’s largest mortgage lender,1 Quicken Loans services nearly every type of loan, from higher-value jumbo loans to affordable, accessible FHA loans. Quicken Loans has helped millions of homeowners buy homes, and it offers an exceptionally easy online mortgage application process. The company’s Rocket Mortgage® platform makes the online application easy.
The company has streamlined the process so you can apply for your loan from a phone or tablet. The Rocket Mortgage® platform also includes tons of information that first time homebuyers will find useful. Rocket Mortgage® is one of the best choices, with a wide range of loan options and an easy approval process.
Why We Love It: Quicken Loans can be a valuable resource if you are in need of fast approval but lack the time to go through a traditional loan application process. With Quicken Loans, you can quickly qualify for a loan without the extensive paperwork and lengthy approval process that often comes with conventional lending institutions. Additionally, Quicken Loans offers a variety of government and conventional lending options, providing you with flexibility and choices to suit your specific financial needs.
Best for Veterans: Veterans United
Veterans United is a mortgage lender that specializes in providing VA loans. VA loans are a special type of mortgage loan that requires a $0 down payment exclusively for veterans and service members. Veterans United also employs a full staff of former service members from each branch of the military who understand the VA loan process on a personal level. This means that you’ll get direct advice from men and women who have gone through the process themselves.
In addition to VA loans, Veterans United also offers streamlined VA refinance loans and conventional mortgage solutions. Take a look at Veterans United if you’re a service member or veteran looking for the easiest way to understand the VA loan process.
Why We Love It: Veterans United provides a variety of VA loan options to assist veterans in securing the necessary funding for their housing needs. These loans are specifically designed to cater to the unique requirements of military service members, offering competitive interest rates and favorable terms. Veterans United also offers refinancing options on existing VA loans, allowing veterans to lower their monthly payments or access cash for other expenses.
Best for an Online Mortgage Process: better.com
better.com is a new online mortgage company with a streamlined application. By cutting steps and expenses from the traditional mortgage process, Better.com can speed up your preapproval and offer you lower interest rates.
To get started, just answer a few questions about your income, co-borrowers on your loan, when you plan to purchase a property and your assets. You can complete this on your phone and receive a decision in as little as a few minutes. better.com even offers a Better Price Guarantee that ensures that you’re getting the most affordable APR possible.
Why We Love It: Better.com offers a streamlined online experience that is perfect for home shoppers who may be feeling overwhelmed or pressed for time. With its user-friendly platform, you can easily navigate through different mortgage options and find the best fit for your needs. Additionally, Better.com allows you to use co-signers, which can help make homeownership more affordable and accessible.
Best for FHA Loans: PennyMac
PennyMac is a unique lender that provides both online and in-person FHA loan servicing. The company is one of the largest FHA lenders in the United States and its network can help you connect with over 32,000 realtors to find your perfect property.
The company also commits to on-time closing promises to help you close your loan or refinance on schedule. PennyMac might be the right choice for you if you’re looking for an affordable, convenient way to finance with an FHA loan.
Why We Love It: PennyMac offers the convenience of securing an FHA loan, which can significantly simplify your financial situation and provide a boost to your savings. By choosing PennyMac, you can benefit from tailored assistance, especially if you’re unfamiliar with the loan application process or find mortgage terminology overwhelming.
30-Year Mortgage Advantages
The 30-year mortgage loan is one of the most common mortgage choices. Let’s take a look at some of the benefits to get a 30-year loan. Remember, you can use a mortgage calculator to handle these figures, if you so choose.
- Lower monthly payment: You’ll pay less for a 30-year mortgage each month compared to a 20- or 15-year loan — it’s one of the biggest benefits of choosing this type of mortgage. Let’s take a look at an example to illustrate just how big the difference is. Remember, a mortgage rate lock can help you keep that monthly payment down.
Let’s say you want to buy a home worth $250,000 and need to borrow $200,000. You can choose between a 15- or a 30-year mortgage term. Each loan option has an interest rate of 3.5%. You’ll pay about $1,430 each month if you choose the 15-year loan. On the other hand, you’ll pay about $900 a month for your mortgage if you take the 30-year loan — a difference of over $500. Choosing a 30-year loan can help you lower your monthly payment.
- Opportunity to invest elsewhere: You may have leftover money to invest elsewhere if you get a 30-year mortgage. Let’s say you need to build an emergency fund or flesh out your retirement savings — a 30-year mortgage can help you divert your extra money to other options.
- More flexibility: Most mortgage companies no longer include a prepayment penalty in mortgage contracts. A prepayment penalty is a clause that requires you to pay a fixed fee if you pay off your loan early. This means that if you end up having extra cash, you can put it toward your mortgage’s principal balance.
Choosing a 30-year mortgage loan gives you more freedom to pay down your loan. For example, let’s say you can choose between a 15-year loan with a $1,500 monthly payment and a 30-year loan with a $1,000 monthly payment. You’d have $1,500 extra to spend each month. If you take the 15-year loan and your income decreases, you run the risk of foreclosure. However, if you choose the 30-year mortgage, you can either pay $1,000 each month or divert your extra $500 toward reducing your principal.
30-Year Mortgage Disadvantages
Despite the benefits, 30-year mortgage loans aren’t right for everyone. Let’s take a look at a few of the disadvantages of a 30-year loan.
- You’ll pay more in interest. Choosing a 30-year mortgage loan means you’ll rack up significantly more interest by the time you own your loan. Because this option gives you more time to pay off the loan, your lender also has more time to charge interest on the amount of money you borrow. Let’s take a look at an example.
Let’s say you have to choose between two $200,000 mortgage loans that each have an interest rate of 3.5%. If you take a 15-year loan, you’ll pay a total of about $57,350 in interest by the time you own your home. If you take the 30-year loan, you’ll end up paying over $123,000 in interest by the time you make your final mortgage payment. Options with shorter terms are always less expensive over time — 30-year loans are much more expensive in comparison. Plus, private mortgage insurance increases the payment, and these fixed rate mortgages could rise in value because your property taxes will likely rise each year.
- You’ll pay a higher APR. Mortgage lenders see you as a riskier borrower when you have a longer mortgage term. A 30-year term means you have twice the amount of time to default on your loan than someone who has a 15-year term.
To compensate for this risk, lenders charge a higher interest rate on 30-year loans. For example, Quicken Loans currently offers 30-year loans with an average APR of 3.652% and 15-year loans with an average APR of 3.466% APR. Though that might not seem like a huge difference, even a fraction of a percentage point can end up costing you thousands more by the time you own your home free and clear.
Find the Right Loan for You
Choosing a home and committing to a mortgage is a major decision, so leave yourself plenty of time to learn about each of your options in detail. If you’re considering the leap from renter to homeowner, analyze the different loan terms can offer to decide if a 30-year mortgage is the right loan for you.
Frequently Asked Questions
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Yes, you can consider refinancing your current mortgage to take advantage of lower 30-year mortgage rates.
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Yes, you can often lock in a specific 30-year mortgage rate for a certain period of time to protect yourself from rate increases while your loan application is being processed.
1Based on Quicken Loans data in comparison to public data records.
