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Best Lender Options for a Small Mortgage

What are the best lender options for a small mortgage?

Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience
, Trusted Mortgage Expert with 45+ Years of Experience

It can be challenging to find lenders that offer smaller mortgages because most lenders apply a minimum loan amount of $75,000 to $100,000. In short, lenders prefer larger mortgages because they make more money on closing costs and interest.

Lenders that do offer small mortgages usually charge a higher interest rate and fees to offset the lower loan amount. This creates a challenge for borrowers who want or need a small mortgage because not only do fewer lenders offer them but the loan terms are more expensive.

This is why when you are looking for a small mortgage it is especially important to shop multiple lenders to find the lowest rate and fees. Although the comparison process may be more challenging because the universe of participating lenders is relatively small, there are certain types of lenders you should focus on to make your search more productive.

I recommend that you contact local credit unions, smaller banks and community lending institutions in your area. Community-based lenders, and credit unions in particular, may offer more flexible qualification guidelines and provide the smaller mortgage amount you are seeking.

Again, it may take some extra time and effort to gather and compare multiple proposals but finding the best terms can reduce your monthly loan payment a lower your total interest expense, even for a small mortgage.

The table below shows mortgage rates and fees for leading lenders in your area. We recommend that you contact multiple lenders to understand their minimum loan amount and qualification guidelines.

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Current Mortgage Rates as of October 23, 2019
  • Lender
  • APR
  • Loan Type
  • Rate
  • Payment
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Data provided by Informa Research Services. Payments do not include amounts for taxes and insurance premiums. Click for more information on rates and product details.

You can also use the FREEandCLEAR Lender Directory to search over 3,900 lenders by type. For example, you can search for top-rated credit unions in your area to determine if they offer small mortgages.

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About the author

Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR.  Harry is a licensed mortgage professional (NMLS #236752). More about Harry

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