When you take out a mortgage, there are several costs you, as the borrower, have to pay when you sign your loan documents.
Closing costs — which include lender fees, home appraisal, title search and notary fees — can add up to 2% to 6% of the loan total. On a $200,000 mortgage, you could be paying as much as $12,000 in closing costs.
You won’t find a mortgage with no fees at all, but some lenders waive certain charges or provide financial support to help pay those expenses. We’ve chosen the best of these lenders in a variety of categories.
To learn how we made our selections, check out our methodology.
Best mortgage lenders with low fees
Best for closing cost discount: Better Mortgage
- No application fee or underwriting fee
- Preapproval in as little as three minutes
- $100 rate-match guarantee
- 24/7 customer support
- Doesn’t offer USDA loans
- HELOC requires draw of at least 75% of your home’s value
- No physical branches
Who’s this for? Better provides borrowers with up to $2,000 in closing cost discounts if they use Better Agent Match, its real estate agent matching service.
Standout benefits: Better’s HOPE Grant provides qualified homebuyers with $5,000 to put toward a down payment or closing costs.
Best for no application fee: Alliant Credit Union
Alliant Credit Union Mortgages
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Types of mortgages
Conventional, FHA, USDA, VA, jumbo, doctor, construction, refinance, HELOC
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Terms
Fixed rate: 15, 20 or 30 years; Adjustable rate: 5, 7 or 10-year initial period
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Minimum credit score
620 for conventional, 500 for FHA
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Minimum down payment
0% with Alliant Advantage Mortgage, 3.5% with FHA loan, 0% with VA or UDSA loan
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Membership requirements
A $5 donation to Foster Care to Success, which Alliant will cover.
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Availability
Alliant Credit Union lends in all 50 U.S. states and Washington, D.C.
Pros
- No application fee
- Zero-down payment option with no PMI
- Borrowers can get $6,500 if they use a partner real estate company
Cons
- Must live in select areas or work for partner company
- No home equity loans
Who’s this for? Alliant Credit Union does not charge an application fee on mortgages, which can save you up to $500.
Standout benefits: Alliant membership is open to virtually anyone. All you have to do is join Alliant Credit Union Foundation as an advocate, which doesn’t cost anything.
Best for closing cost grant: Bank of America
- Affordable Loan Solution® mortgage only requires 3% down
- Up to $10,000 in down payment assistance for eligible borrowers
- Up to $7,500 in closing cost grants in select markets
- No annual fees or closing costs for HELOCs
- Existing BoA customers eligible for discounted rates or fees
- Lender fees not disclosed
- No USDA loans, home equity loans or reverse mortgages
Who’s this for? Bank of America provides up to $17,500 towards closing costs or down payment for eligible borrowers. That’s one of the best assistance programs in the industry.
Standout benefits: The Preferred Rewards Program allows existing BoA customers who meet a minimum balance requirement to get up to $600 off their origination fee.
Best for no fees on home equity loan: Fifth Third Bank
Fifth Third Bank
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Annual Percentage Rate (APR)
Apply online for personalized rates
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Types of loans
Conventional loans, VA loans, FHA loans, jumbo loans, physician loans, construction loans, jumbo loans, HomeReady, Home Possible, community loans
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Terms
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Credit needed
620 for conventional loans, 580 for FHA loans
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Minimum down payment
0% for VA loans, 3% for conventional loans
Who’s this for? If you’re looking to borrow against your home equity, Fifth Third Bank does not charge fees on its HELOCs and home equity loans.
Standout benefits: Enroll in autopay and Fifth Third Bank will give you a 0.25% rate discount.
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How to choose a mortgage
Here’s what to consider when choosing a mortgage lender.
Loan types: When you’re narrowing down which lenders to apply to, only pick a lender that has the type of loan you want. For example, many lenders don’t offer USDA loans, so if you’re searching for that product, you’ll have to focus your options.
Loan limits: You’ll also want to make sure that you can get a big enough loan from whatever lender you borrow from.
Down payment: If you’ve only saved up a small amount for a down payment, you may have to look for lenders that offer low-down-payment products.
Closing timeline: If speed is your priority, look at the average closing times.
What are closing costs?
Closing costs are an assortment of payments due when you close on a mortgage. Here are some of the fees that are included:
- Origination fee: This is what the lender charges to pull together and fund your loan.
- Appraisal fee: The lender will hire an appraiser to make sure the home is worth the amount you’re paying. They’ll add this cost to your bill.
- Home inspection fee: Additionally, the lender will typically hire a home inspector to make sure the house doesn’t have any red flags. You’ll be responsible for this cost, too.
- Title search and insurance fee: A title search firm will make sure there are no other claims to the property and an insurance company will ensure that this is the case.
Types of mortgages
Here are some of the most common types of mortgages you can apply for.
Conventional mortgage
The most common type of home loan, a conventional mortgage is offered by a private lender, such as a bank or credit union. Conventional loans typically require a down payment between 5% and 20%.
FHA loan
An FHA loan is still issued by a private lender but it’s backed by the Federal Housing Administration. It usually requires a smaller down payment, typically 3.5% with a credit score of 580 or 10% with a score of 500.
VA loan
A VA loan is guaranteed by the U.S. Department of Veterans Affairs. It may be issued by a partner bank or credit union or by the VA directly. These loans usually don’t require a down payment but you must be an active service member, a veteran or a surviving spouse to be approved.
USDA loan
A USDA loan is backed by the U.S. Department of Agriculture and doesn’t require a down payment or mortgage insurance. Applicants must meet income requirements, however, and the funds must be used to buy a home in a qualifying rural or suburban area.
Jumbo loan
A jumbo loan exceeds the limits on mortgages backed by Fannie Mae or Freddie Mac. The conforming loan limit in 2024 is $766,550 in most parts of the U.S., although some high-price areas have limits up to $1,149,825.
Lender fees FAQs
What is an origination fee?
An origination fee covers the cost of processing your mortgage. It may be lumped in with other upfront costs or waived in exchange for a higher interest rate or some other adjustment to your loan. Origination fees are commonly between 0.5% and 1% of your mortgage, although some lenders charge a fixed amount.
What is a title search?
A title search is a review of public records to ensure the person selling a home is the legal owner and to uncover and liens, unpaid taxes or other claims against the property. Lenders will often require title insurance, which protects them against financial loss if it turns out there are issues with the title.
What are lender fees?
“Lender fees” is an umbrella term referring to the various charges associated with processing, approving and funding your loan. These are essentially a subset of closing costs and can include an origination fee, processing fee, underwriting fee and more.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every mortgage review is based on rigorous reporting by our team of expert tors with extensive knowledge of home loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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Our methodology
CNBC Select analyzed dozens of U.S. mortgage lenders to see which offered discounts on lenders fees or closing costs, waived certain charges or contributed to closing costs directly.
When ranking the best, we focused on affordability, availability, customer satisfaction and how each closing cost perk compared to other lenders.
We also considered CNBC Select audience data when available, such as general demographics and engagement with our content and tools.
Rates and fee structures cited for mortgages fluctuate in accordance with the Fed rate and company policy.
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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.