Home Loan Reviews

Although a lot of people think that the term "home loan" refers to mortgages for home purchases with or without renovations, it can also describes other types of scenarios like loans for home remodeling or improvements and refinancing. Banks, credit unions, mortgage companies direct and brokerage firms offer home loans as conventional and government loan products.

Reviews You Can Depend On

Our website is one of the best places online to start your search. We offer a huge archive of detailed home loan reviews written by borrowers who come from a wide range of backgrounds. Each reviewer is also required to rate a loan product's interest and fees, a lender's services and their overall satisfaction.

Important Areas of Focus

When our reviewers give their positive and negative home loan experiences, they provide insights that can help you to better understand a particular lender, the products offered by that lender and home loan lending in general. To make an informed decision, we highly recommend that you look for and compare the following details as you read our reviews:

  • Application Requirements
    Lenders consider many things when reviewing your application, including your credit score, total income, credit utilization, current loans and debt and payment history. For a conventional loan, you usually need a credit score that goes no lower than 620. That said, you can have a credit score of 580 or lower and still get a good interest rate with certain non-conventional products like government Fair Housing Act loans. FHA loans exist specifically to help people who have credit scores of 580 and lower or bad financial histories own homes and build their finances. You must usually show that you either have a recent history of timely, consecutive payments for other types of debt or that your job provides you with enough money to make timely home loan payments.
  • Down Payment
    The amount of the down payment depends on a lot of factors as well, including the value of the property, amount of the loan, fees and interest. Financial institutions usually want you to be able to pay 20 percent or more. If you can't put that much down, you might be able to get a government loan and pay less. For example, with a credit score of 580, you might be able to get an FHA product that only requires 3.5 percent of the total amount as a down payment. With this type of loan, you must usually also get insurance paid direct to the lender through a higher interest rate or paid as a monthly premium.
  • Loan Insurance
    Home loan insurance is designed to protect a financial institution during certain negative events. With lender mortgage insurance(LMI), also known as lender-paid mortgage insurance, the lender pays for the insurance by charging the borrower a higher interest rate. The lender looks at the "loan-to-value ratio," which is a lending risk comparison between the amount of the loan and the estimated value of the property, to determine the rate. With a conventional loan, you can usually convince a lender to drop the insurance after the LTV ratio goes below 80 percent. On the other hand, with certain government loans, you must refinance instead. Keep in mind that although home loan insurance might help prevent default during an emergency, other insurance products typically offer better protections.
  • Interest Rates
    As with any type of loan, the interest rate depends on the latest rates for that day or week, your credit score, any discounts that you receive and other factors. You might pay a variable or fixed form of interest or a hybrid where you are initially charged a fixed rate that later becomes variable. With loans that have variable rates, especially adjustable rate mortgage products, the rate typically stays between a preset minimum and maximum amount as it changes. It is important that you always ask for a "locked-in" rate in writing to protect against market rate increases during the loan processing period.
  • Standard Fees
    You can expect lenders to tack on fees during almost every step of the loan process. You can usually convince a lender to waive some fees, but always remember that lenders often waive a fee and then charge you more interest or roll the waived fee amount into another fee. Common fees include an application fee, origination, processing or preparation fee, a property valuation, an appraisal or a survey fee, an account maintenance fee, an annual fee, a credit check fee and a locked-in rate fee. If you are trying to buy a home, you can expect several additional fees including title examination, abstract and insurance fees, a deed preparation fee, recording fees and attorney fees. Of course, in all scenarios, you must also pay estimated taxes. In some cases, depending on how the lender requires repayment, you might also have a payment processing fee.
  • Special Fees
    Financial institutions often charge a "prepayment" penalty fee if you pay more than you owe each month. If you decide to make extra payments, some lenders allow you to borrow against or take back the amount. In these situations, you might have to pay a withdrawal fee. For example, in Australia, you can withdraw some or most of the overpaid amount as long as you pay a "redraw fee." In the United States, you must refinance the existing loan for a higher amount so that you can get cash from the difference or establish a Home Equity Line of Credit where you essentially take out a credit-style loan with your home serving as collateral.
  • Product Discounts
    With mortgages, discounts usually come in the form of lowered interest and monthly payments from your buying points that equal approximately one percent of the total loan amount or principal. This type of discount is called "buying down the rate." Brokers and banks often use points as an incentive because they can then pocket the money as compensation. Points sometimes also cover certain processing fees. A borrower, seller or both can buy down the rate. Points though are not the only home loan discount available. With home remodeling and refinancing loan products, a lender might lower interest or waive a fee if you have an excellent credit history. Discounts are also often given to veterans, college graduates, first-time borrowers and rural residents. For example, VA and USDA loans are available at lower rates for veterans and rural residents, respectively. Sometimes a lender offers a discount or waives a fee because you have an existing account or you agree to automatic payments. Keep in mind that although banks and credit unions can customize products, brokers often find better deals because they have relationships with more than one financial institution.
  • Loan Terms
    One of the biggest complaints from borrowers is that they were told incorrect information and received fees that they did not realize applied to their loans. Our reviews can help you learn about specific representatives and institutions that failed to verbally give borrowers all of the details that they needed to understand their responsibilities. That said, we recommend that you never rely only on the word of another person when borrowing money. Always read all loan documentation thoroughly, including the fine print, and make certain that it outlines everything in easy-to-understand language. Your loan paperwork should provide clear answers to all of your questions about monthly payment amounts, the start and end of the loan repayment period, insurance and prepayment rules, fees, penalties and other loan agreements.
  • Credit Date
    Some lenders take payments after their business hours at night and on weekends, but refuse to credit the payment until the next business day. Some refuse to accept a payment at all unless it is during their office hours. When this happens, you can be held accountable and default on your agreement or receive a late payment fee. Our reviews can help you find and then disregard lenders who fail to credit a payment on the day that you make it.
  • Cosigner Release
    You might decide to apply for a loan with a cosigner for different reasons. For example, you have bad or no credit, you are younger than 18 years old or your income fluctuates week-to-week or month-to-month. Always confirm that the lender offers a cosigner release option so that you can become the only responsible party for the loan after you meet certain requirements like improving your credit, making a preset number of timely payments, reaching your majority or stabilizing your income. Without a release, your cosigner is responsible for paying the remainder of your balance if you fail to do so for some reason.
  • Loan Transfers
    Many lenders sell loans to other lenders or transfer the responsibility of dealing with borrowers to a third-party loan servicing company or debt collection firm. These financial institutions can sometimes take more than a month to inform a borrower about a loan transfer. In the meantime, as the loan transfer happens, you might suddenly find yourself dealing with an expensive mess because of missing physical or electronic documentation, loan repayment term errors, new fees or delayed billing statements, automatic payments or payment credits. You can lose hours or even days of work or personal time on the phone, sending faxes, emailing information or talking with representatives in person trying to get assistance.
  • Account Services
    Our reviews can help you learn if a lender provides both basic and superior account services. Look for lenders that provide excellent communication and customer service, online and mobile loan monitoring tools and state-of-the-art security. To prevent long phone wait times, online and mobile tools should give you everything you need to manage your account online, including all pertinent loan details, statements and chat or email contact options. A lender should also supply non-emergency and emergency customer service 24 hours a day, seven days a week without long hold times and delays. If you decide to repay your loan from a checking or savings account, you should also look for lenders who offer remote low balance warning notifications.

Important Reminders About Home Loans

Some lenders refuse applications from borrowers who have old histories of non-timely payments. When applying for your loan, speak honestly about your past financial problems and the methods that you used to correct them so that the loan representative never gets any negative surprises.

The best lenders do more than offer you an fantastic home loan product. Always look in our reviews for stories about lenders who took the time to ask borrowers about their financial goals and acted in a consultative fashion where they went above and beyond to find the right rather than the costliest product for a borrower.

Some lenders charge a "processing fee" and then a separate fee by a different name that another lender might also consider part of loan processing like a credit check fee or account maintenance fee. As a result, never accept the fee at face value without asking for a list of processing services included in it and then compare that fee and services to the processing fees from other financial institutions.

Making a House a Home

Many people find the task of procuring a home loan overwhelming, but with enough research, comparisons and planning you can get the loan that you need at a price that you can afford with little difficulty. Our home loan reviews and tips can help you create a list of lenders who not only meet your financial needs, but who also provide stellar services that help reduce the natural stress that comes from applying for and paying off a home loan.