mortgage lender

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A mortgage escrow account is an integral part of the financial picture for many homeowners. These accounts are typically used in two ways: to hold an earnest money deposit a buyer puts on a home after signing a contract with the seller (it’s released at the closing), and to pay a homeowner’s property taxes, mortgage insurance and homeowners insurance premiums.

When it comes to the latter, some homebuyers are required by their mortgage lender to have an escrow account; others may opt into one through their mortgage servicer. Here’s how mortgage escrow accounts work, and if you do have a choice, the pros and cons to consider.

How do mortgage escrow accounts work?

Once you become a homeowner, a mortgage escrow account is an account used to hold and ensure that some of the major, ongoing expenses associated with your home are paid on time. Typically these expenses include:

  • Mortgage insurance payments
  • Homeowners insurance premiums
  • Property taxes

Instead of paying insurance and taxes separately, from a personal account, the money to cover these bills — plus a little extra, known as a “cushion” — is included in your total monthly mortgage payment. The mortgage lender or servicer holds these funds in an escrow account and makes the payments on the homeowner’s behalf as they are due. Payments might be made monthly, quarterly or bi-annually.

The key difference between an escrow account and any other financial account you might have: You don’t manage an escrow account yourself. Escrow is facilitated by a third party — in this case, your lender or servicer.

Should you use an escrow account?

Depending on the type of loan and its specifics, you might not have the option to forgo an escrow account. If you’re obtaining a conventional mortgage — that is, one from a private bank or lender — an escrow account is often required with a down payment of less than the standard 20 percent, as is mortgage insurance. You often don’t have a choice if you’re getting a federally backed loan, either. FHA loans and USDA loans require escrow accounts, though VA loans do not.

Let’s assume you do have a choice. There are viable reasons to have an escrow account: It can be an easy, hassle-free way to make payments for your mortgage, homeowners and mortgage insurance and property taxes, and the cushion can help cover potential shortfalls. You don’t need to be diligent about setting aside the funds, including extra for any unforeseen increases in premiums or taxes, and then making sure you meet the due dates for payments. Of course, there are negatives as well — it increases your monthly mortgage payment, and you might prefer to handle your own finances yourself, without a third party involved.

Pros of a mortgage escrow account

It’s automatic

Having your mortgage lender or servicer hold your property tax and homeowners insurance payments in escrow ensures that those bills are paid on time, automatically. You don’t have to keep track of it, or even think about it, and you avoid penalties such as late fees or potential liens against your home.

You’re covered when there are shortfalls

Homeowners insurance premiums and property tax assessments can fluctuate over time. For example, if your escrow account happens to be short due to your property tax bill increasing, your servicer will typically cover the difference temporarily. To make up for it, they’ll eventually increase your monthly mortgage payment.

No surprises

The exact amount needed for escrow is added to your monthly mortgage payment for you, so you’ll know what to expect the majority of the time. If the escrow component of your monthly mortgage payment needs to increase, you’ll get a notice from your lender or servicer in writing. Plus, your lender or servicer is required to send you an annual escrow statement that shows the amounts you’ve paid (and the drawdowns) along with any overages or shortages.

“Escrow accounts make life a lot easier for the majority of homeowners that want to add predictability to their monthly expenses, rather than getting whacked twice a year with big insurance and property tax bills,” says Greg McBride, CFA, Bankrate’s chief financial analyst.

Potentially lower mortgage costs

Depending on your mortgage lender, you may be able to get a discount on your interest rate or closing costs just by having an escrow account.

Cons of a mortgage escrow account

It’s automatic

While it’s convenient to not have to think about making various payments on time, this pro can actually be a con for organized homeowners who prefer to have full control over their payments. Many mortgage lenders allow homeowners to make property tax payments directly to the county assessor and homeowners insurance payments to their insurer.

You might miss out on investment opportunities

In particular, the money that might end up as an overage in an escrow account could be used for short-term investments. Earning interest on such investments may make more financial sense for you, instead of allowing a bank or lender to reap the gains.

Digital tools and attractive CD rates can help you invest your money outside of escrow and earn a better return for the long term, notes Henry Yoshida, founder and CEO of Rocket Dollar, a platform based in Austin, Texas, that enables users to invest funds from tax-advantaged retirement accounts.

“With interest rates where they are, there is limited opportunity cost from forgoing interest earnings on money that is instead being escrowed by the loan servicer throughout the year,” McBride says.

A large upfront deposit

Often, setting up an escrow account requires a homebuyer to deposit an amount equal to two to three months’ worth of property taxes and insurance premiums. These are sometimes called “prepaids,” and they can significantly add to your mortgage closing costs.

Because you’ll be paying for insurance and taxes with your regular mortgage payment, you’ll have a higher payment each month. Of course, you have to pay for insurance and taxes anyway, so they aren’t an additional cost. But having them in your monthly payment could leave less room in your budget month-to-month, and prepaids can exacerbate that.

Can be a target for scammers

Large sums parked in an escrow account make it an attractive target for fraudsters. Common mortgage escrow fraud schemes include cyber-thieves setting up fake websites that look similar to the servicer you’re working with, or spoof email addresses to try to get your personal information. Some sophisticated scammers even set up fake phone lines in an attempt to build trust. Under these false pretenses, fraudsters might try to persuade you to wire them money.

Possibility of incorrect estimates

The amount that needs to be tucked away in your escrow account hinges on your insurance premiums and property taxes, which can vary year-to-year. Generally, the previous year’s bills are used to figure out how much you’ll need, but incorrect estimates can happen if, for example, the assessed value of your home has increased — or you appeal and get a reduction in your property taxes.

FAQs

  • No. Mortgage escrow accounts are typically only required with certain types of loans — if you’re not financing your home purchase with a mortgage loan, it’s not a requirement. You can pay your insurance and property taxes on your own if you choose, as you would any other types of bills, or you can set up an escrow account at your bank if you’d like the convenience of them doing it for you.

  • An escrow account for a home purchase is managed by a third party, such as a mortgage servicing company, escrow agent or escrow company. Its purpose is to pay for taxes and insurance — the funds are included in your total monthly mortgage payment, and the servicer or agent makes the payments automatically on your behalf. Many people find this convenient, but some would rather manage their finances themselves.

  • No, you cannot take money out of your escrow account. The money held in a mortgage escrow account is held by the lender or loan servicing company on your behalf, to serve a specific purpose, and it is not typically accessible to the homeowner.

Bottom line

With a mortgage escrow account, your mortgage lender or servicer is allowed to collect the amount of your homeowners insurance, mortgage insurance and property tax payments, sometimes plus a cushion, month in and month out. It’s a very common financial tool and helps to ensure your obligations as a homeowner are met without much effort on your part (aside from making your mortgage payment). However, if escrow isn’t required, you might want to explore alternative uses for those funds.

Source: thesimpledollar.com

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A dollar ain’t worth what it used to be; just take a look at the newly released 2023 conforming loan limits.

Yes, they will exceed $1 million in high-cost areas beginning next year, which is a testament to just how much property values have risen lately.

Of course, the year-over-year change actually pales in comparison to the jump seen a year earlier.

This is due to a slowdown in home prices, which was somewhat captured by the Federal Housing Finance Agency’s (FHFA) third quarter report.

For one-unit properties, the national baseline will rise to $726,200, an increase of $79,000 from $647,200 in 2022.​

2023 Baseline Conforming Loan Limit Rises to $726,200

• One-unit property: $726,200
• Two-unit property: $929,850
• Three-unit property: $1,123,900
• Four-unit property: $1,396,800

The FHFA determines the conforming loan limit each year, basing it on the average U.S. home value over the past four quarters.

They utilize their own Federal Housing Finance Agency House Price Index (FHFA HPI®) to determine how much home prices have risen in the preceding 12 months.

This captures home price movement from the third quarter of 2021 to the third quarter of 2022.

Their latest HPI found that property values had risen 12.21% over the past four quarters, which allowed them to raise the conforming loan limit by the same amount.

As such, home buyers and those looking to refinance will be able to get a mortgage backed by Fannie Mae or Freddie Mac (conforming loan) as large as $726,200 for a one-unit property.

Typically, conforming loans are easier to qualify for than jumbo loans, those which exceed the conforming loan limits.

Additionally, mortgage rates are often lower on conforming loans, though lately it’s been a bit mixed due to adverse conditions in the secondary market.

We’re actually lucky the conforming loan limit for 2023 rose as much as it did, as home prices have decelerated immensely.

Despite experiencing positive annual appreciation each quarter since the start of 2012, home values were up just 0.1% in the third quarter from a quarter earlier.

That meant the 12.21% increase was significantly lower than the 18% increase in loan limits seen a year prior.

And the way things are going, we could see a negative number in the fourth quarter from the third.

2023 High-Cost Loan Limits Exceed $1 Million

• One-unit property: $1,089,300
• Two-unit property: $1,394,775
• Three-unit property: $1,685,850
• Four-unit property: $2,095,200

As noted, the high-cost loan limits are, well, even higher, exceeding $1 million for the first time ever.

This means existing homeowners and prospective home buyers in places like Los Angeles, the Bay Area, New York City, and even Park City will be able to obtain Fannie/Freddie-backed mortgages for seven figures.

Specifically, the new ceiling loan limit for one-unit properties in these areas will be $1,089,300, which is 150 percent of the 2023 baseline limit of $726,200.

And if we’re talking about a four-unit investment property, loan amounts can exceed $2 million, which is bonkers.

Additionally, in Alaska, Hawaii, Guam, and the U.S. Virgin Islands, the baseline loan limit matches the high-cost loan limit of $1,089,300 for one-unit properties.

The FHFA noted that because of rising home values, the loan limits will be higher next year in all but two U.S. counties or county equivalents.​

Prior to this announcement, several mortgage lenders increased their conforming loan limit in anticipation of the higher loan limits.

For example, the nation’s top mortgage lender, Rocket Mortgage, began accepting loan amounts as high as $715,000 back in September via their wholesale division Rocket Pro TPO.

And the nation’s new top mortgage lender (as of the third quarter of 2022), United Wholesale Mortgage, did the same shortly thereafter.

It appears they played it safe, knowing home price appreciation would be sufficient to keep their speculative loan limits below the official ones.

2023 FHA Loan Limits

• One-unit property: $472,030
• Two-unit property: $604,400
• Three-unit property: $730,525
• Four-unit property: $907,900

Loan limits on FHA loans are also dictated by the conforming loan limits, with 65% of the CLL used for the floor and 150% used for the ceiling.

This means the 2023 FHA loan limits will be $472,030 in low-cost areas and as large as $1,089,300 in high-cost areas.

The 2023 FHA loan limit rises $51,350 from $420,680 in 2022. All in all, good news for prospective home buyers and those looking to refinance.

For properties in Alaska, Hawaii, Guam, and the U.S. Virgin Islands, the FHA loan limits are even higher than the conforming ones.

• One-unit property: $1,633,950
• Two-unit property: $2,092,150
• Three-unit property: $2,528,775
• Four-unit property: $3,142,800

Yes, you read that right, $3 million+ FHA loan limits for certain multi-unit properties. Wow.

Simply put, most borrowers shouldn’t need a jumbo loan in 2023.

Source: thetruthaboutmortgage.com

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Florida Gov. Ron DeSantis might be best known these days for his “war on woke.” He’s generated daily headlines for his “Don’t Say Gay” bill in schools, his battles against Disney, and the travel advisories issued against the state by the NAACP and LGBTQ organizations.

However, his housing policies haven’t generated nearly as much attention.

After months of fueling rumors, DeSantis formally announced his bid for the U.S. presidency on Wednesday. What would that mean for the housing market if he wrests the Republican nomination from real estate mogul and former President Donald Trump and wins the general election in 2024? (Currently, Trump has a sizable advantage in the polls among likely GOP voters.) Realtor.com® looked at the No. 2 Republican contender’s housing-related priorities during his four-plus years as governor of the Sunshine State for clues.

“His experience as the governor of Florida has certainly exposed him to the housing market and its issues,” says Sean Snaith, director of the Institute for Economic Forecasting at the University of Central Florida in Orlando. “He’s intimately familiar with the shortage of housing that has plagued our state.”

Florida experienced tremendous growth during the COVID-19 pandemic as companies expanded and legions of folks moved to the Sunshine State. It was the nation’s fastest-growing state last year, according to the U.S. Census Bureau. The median home list price in Florida shot up 42%, to about $468,000, from April 2020 to April 2023, according to Realtor.com data. Rental prices also surged throughout the state during the pandemic.

This year, DeSantis has passed bills geared toward creating more housing, providing assistance to first-time buyers, as well as restricting international buyers from certain countries from purchasing real estate in Florida. The government has also responded to the devastation wrought by hurricanes and flooding by making changes to Florida’s property insurance industry.

The legislature has also been forced to confront the state’s affordability challenges. For years, the state had typically been reallocating the money from its affordable housing trust fund to other projects. In 2021, the legislature agreed that a third of that money will be spent on housing, while the rest can go to other priorities.

Democrats have blasted diverting the money away from housing during such a severe real estate shortage.

DeSantis and Trump will have plenty of competition from other Republicans vying for the nation’s highest office. Former South Carolina Gov. Nikki Haley announced her candidacy in February. South Carolina Sen. Tim Scott threw his hat in the ring this week, and former New Jersey Gov. Chris Christie is expected to enter the fray. New Hampshire Gov. Chris Sununu and former Vice President Mike Pence are also likely to run.

Whoever wins the 46th presidency—from either side of the aisle—will have a major challenge in tackling the housing crisis.

“It would have to be concerted efforts from all levels of government,” says Snaith. “We need to help expedite the process for developers from going from paper to getting these housing units off the ground.”

DeSantis tries to create more affordable housing

In March, DeSantis signed an affordable housing plan that invested more than $700 million to provide low-interest loans to developers building workforce housing in Florida, down payment and closing costs assistance for first-time homebuyers, and the redevelopment of underused properties near military installations.

The Live Local Act is also expected to make it easier to convert commercial buildings into housing by bypassing local zoning boards, building height requirements, and local density regulations.

While superseding local authorities and zoning regulations can lead to a strain on local infrastructure—such as more traffic, crowding in schools, and other growing pains—the housing shortage “trumps” these concerns, says Ken Johnson, a real estate economist at Florida Atlantic University in Boca Raton.

“This will start to increase the supply of housing rather rapidly. We just need units built right now,” says Johnson. “We are still in a rental crisis here.”

He was less enthusiastic about the $100 million provided for down payment and closing costs assistance. The money will fund the Florida Hometown Heroes Housing Program, which the governor announced the creation of last year. It’s geared toward eligible first-time buyers who work in critical professions such as law enforcement, firefighting, education, health care, and child care, and active military or veterans, among others.

“There’s not enough money behind them to make a dent,” says Johnson.

The Live Local Act also prohibits towns and cities from enacting rent controls.

The state of Florida is short about 444,000 affordable and available rental homes for extremely low-income renters, according to the National Low Income Housing Coalition.

“It has been more pocket change than real substantial solutions to the problem,” says Jack McCabe, who runs an eponymous housing consultancy in Southern Florida. “Seven hundred eleven million dollars looks like a lot of money, but the truth is it could take billions and billions of dollars to correct the problem.”

Restrictions on who can buy homes in Florida

Last week, DeSantis signed a bill to prohibit many Chinese citizens who aren’t legal U.S. residents from purchasing real estate in the state of Florida. The bill also bans citizens from six other countries—Russia, Iran, North Korea, Cuba, Venezuela, and Syria—from buying farmland that is located within 10 miles of military sites and critical infrastructure.

In addition, as of July 1, the new law will require some Chinese nationals to register the real estate they already own and whatever they buy with Florida’s state government.

The law has been criticized by Democrats, Asian American leaders, and some real estate professionals.

“The law is very restrictive,” says Dan Lionetta, president of the Asian American Real Estate Association of America, Greater Jacksonville Chapter. He is also a mortgage lender at Movement Mortgage. “We are certainly not in favor of the law and anyone, from any country, being limited regarding purchasing real estate.”

Real estate economist Johnson believes a bill like this “distorts” the market by dictating who can and who cannot buy.

“It will negatively impact price, although I think it will be marginal,” says Johnson. “We’re simply cutting the demand for real estate.

Tackling Florida’s hurricane and flooding issues

Last year, DeSantis signed a Republican bill to prop up Florida’s property insurance system as many companies have gone out of business and others are struggling due to the extensive damage wrought by storms and flooding. The bill raises costs for some homeowners while providing tax rebates for residents affected by Hurricanes Ian and Nicole. It will also force some homeowners out of receiving coverage from the state-created insurer.

As a result, many Floridians expect their already high flood insurance premiums to double this year.

“Many people are being forced to sell their homes and move,” says housing consultant McCabe.

However, the governor has also signed bills into law to give homeowners a break. One prevents insurers from refusing to cover homeowners if their roof is less than 15 years old. And in the wake of the Surfside condo collapse, buildings that are three stories and higher must be inspected after 30 years and then receive additional inspections every 10 years. Buildings that are within 3 miles of the coast must start undergoing inspections after 25 years.

The governor also approved setting $150 million aside last year to be used for grants for homeowners who want to retrofit their homes to be more resistant to hurricanes.

“The overall impact [of a DeSantis presidency] is hard to say right now,” says Johnson. “It’s a toss-up.”

Source: realtor.com

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You don’t have to be a U.S. citizen to buy a home in the U.S. You don’t even have to be a U.S. resident. Anybody who wants to can purchase property here.

Between April 2021 and March 2022, the value of residential property in the United States that was sold to foreign buyers totaled $59 billion, according to the National Association of Realtors (NAR)’s International Transactions in U.S. Residential Real Estate report. The vast majority of non-resident buyers are from Canada and Mexico, followed by China. They’re largely purchasing detached single-family homes in Florida and California.

While almost half (44 percent) of foreign buyers rely entirely on cash to make these purchases, it’s also possible for non-residents to obtain a mortgage in the United States to help finance the new homes. It’s not all smooth sailing, though. Non-citizen homebuyers will have to deal with slightly more complicated mortgage application requirements establishing their financial qualifications. They will also have more complex tax laws to comply with as homeowners.

What type of property can a non-resident buy?

Any non-U.S. citizen, including permanent residents, temporary residents, non-residents, refugees, asylum seekers and those who are recipients of Deferred Action for Childhood Arrivals (DACA) relief, can buy property in this country. There are no legal restrictions prohibiting the purchase of real estate by individuals who fall into any of these categories.

“Purchasing a residential property in the U.S. is open to any individual regardless of their citizenship,” says Jen Horner, a Realtor with RE/MAX Masters in Salt Lake City, Utah.

There are also no limits surrounding the type of property that can be purchased. A non-U.S. citizen can buy a single-family home, condo, townhouse, duplex or apartment building — or even land with no structure on it at all.

“There are no restrictions in the United States on purchasing a property as a foreign national. This applies to resident foreign nationals who might want to buy property for primary residence based on where they currently live in the United States, or non-resident foreign investors looking to buy property for other reasons — such as investment use or a vacation home,” says Chase Michels, of the Michels Group at Compass in Hinsdale, Illinois.

According to the NAR, between the spring of 2021 and the spring of 2022, 74 percent of foreign buyers purchased a detached single-family home or townhome. In addition, 44 percent of foreign buyers purchased a property for use as a vacation home, rental or both.

What documents does a non-resident need to buy a home?

While they can buy freely, non-U.S.-citizen buyers are typically required to provide additional documentation to complete a home purchase in the United States, compared with U.S. citizens.

The exact requirements vary however, depending on whether the home is being purchased with cash or a mortgage, and based on the specific resident status of the buyer. Some of the basic requirements for non-U.S. citizen buyers, says Michels, often include:

  • A foreign passport, U.S. visa or driver’s license
  • Social Security number or Individual Taxpayer Identification Number (ITIN)
  • Financial statements from applicant’s foreign bank, if applicable
  • Evidence of financial assets/income (bank statements, etc.)
  • Tax returns (preferably U.S., if applicable)

“Cash purchases will require proof of identity and reporting the purchase to the federal government,” says Horner. “If a mortgage lender will be used, they have the ability to request as much documentation as they feel necessary to advance [the] mortgage application.”

Which begs the question: Are non-U.S. citizens able to obtain mortgages to finance home purchases in the United States? The short answer is yes. But it’s complicated.

How can a non-resident finance a home?

In general, mortgage lenders prefer to work with applicants currently living in the United States, and who are classified as permanent or non-permanent residents. (Individuals who have a green card and a Social Security number are permanent residents, while those who have a Social Security number, but no green card, are non-permanent residents.) Their rationale is simple: Applicants residing in this country are viewed as less of a risk, particularly in cases of default on the loan.

Their residency status impacts the specific type of mortgage that can be used. There are two main categories of lending for non-citizen purchases, says Michael Cantwell, loan officer for Guild Mortgage. “One major classification is that of a foreign national and the other would be those individuals currently living in the United States who have not received U.S. citizenship yet,” says Cantwell.

Applicants who fall into either of these categories can usually qualify for a conventional mortgage backed by Fannie Mae and Freddie Mac, as well as Federal Housing Administration (FHA) government-backed loans. However, non-permanent residents will need to be using the home as a primary residence in order to obtain mortgage approval.

“Many banks and mortgage companies offer conventional and FHA home loans to non-U.S. citizens provided they can verify their residency status, work history, and financial track record,” says Michels.

And for non-residents? Applicants living abroad can buy properties in this country using what’s known as a foreign national loan or foreign national mortgage loan, says Cantwell. These loans are typically offered by U.S.-based banks and lenders and are designed for borrowers living outside the country who are seeking to either purchase or refinance. Foreign national mortgages are not backed by Fannie Mae or Freddie Mac.

Additional rules and restrictions for non-residents

Tax rules also apply to properties owned by non-U.S. citizens. For instance, if a non-U.S. citizen rents out the property purchased to generate income, then that income must be reported and taxes must be paid both in the United States and in the property owner’s home country, says Bruce Ailion, a real estate attorney and Realtor with Re/Max Town & Country in Atlanta. In addition, non-U.S. citizens are liable for paying local property taxes.

And when selling a property in the United States as a non-U.S. citizen, capital gains tax will typically apply as well.

“When selling a property in the U.S. there are special withholding provisions that must be complied with,” says Ailion. “A tax advisor with specific knowledge in international tax should be consulted.”

On the plus side, all Fair Housing Act, Title VII, and other anti-discrimination protections apply to real estate transactions involving non-U.S. citizens. These laws are in force no matter who the buyer is, says Michels.

Final word on non-resident home purchases

It is entirely possible to purchase a home as a non-U.S. citizen — whether you’re a foreign national or a permanent or a temporary resident. There are no limitations on the type of property that can be purchased or how the property is used. Furthermore, U.S. laws that protect the rights of all homebuyers cover non-U.S. citizens and non-residents as well.

What’s really more significant, in terms of complications, is not a person’s citizenship, but their place of residency. If you don’t live in the U.S., buying a home does get more difficult — especially if financing is going to be needed for the purchase.

Non-residents must be prepared to deal with additional complexities, including more extensive documentation requirements establishing their identity, income and assets. They are limited to certain types of loans or mortgages, ones not backed by the primary mortgage market-makers. But the path to U.S. homeownership is certainly not blocked — it just may have a few speed bumps on it.

Source: thesimpledollar.com

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Now it’s time to check out the top mortgage lenders in DC, the capital of the United States.

In 2021, nearly 800 mortgage companies originated roughly $139 billion in home loans in The District.

That was one of the bigger totals for a state, even though the District of Columbia isn’t actually a state

Anyway, there can be only one…top mortgage lender to rule the rest. And as you may have guessed, it was Rocket Mortgage.

Some local companies made the top-10 lists as well. Read on to see who.

Top Mortgage Lenders in DC (Overall)

Ranking Company Name 2021 Loan Volume
1. Rocket Mortgage $8.4 billion
2. Pennymac $6.4 billion
3. Freedom Mortgage $5.5 billion
4. Truist $5.4 billion
5. Wells Fargo $5.1 billion
6. loanDepot $4.7 billion
7. Mr. Cooper $3.3 billion
8. McLean Mortgage $3.1 billion
9. Intercoastal Mortgage $3.1 billion
10. UWM $3.1 billion

In 2021, Rocket Mortgage led the District of Columbia with a solid $8.4 billion funded, per HMDA data from Richey May.

They were trailed by Los Angeles-based Pennymac with $6.4 billion, which is a top correspondent lender.

In third was Freedom Mortgage with a close $5.4 billion, followed by Truist with $5.1 billion and Wells Fargo with $4.7 billion.

The bottom half of the top 10 included loanDepot, Mr. Cooper, McLean Mortgage, Intercoastal Mortgage, and United Wholesale Mortgage.

Both McLean Mortgage and Intercoastal Mortgage can be considered local companies as both call Fairfax, Virginia home.

Always good to see some homegrown lenders shake it up with the big national brands.

Top Mortgage Lenders in Washington DC (for Home Buyers)

Ranking Company Name 2021 Loan Volume
1. Truist $2.5 billion
2. Pennymac $2.4 billion
3. McLean Mortgage $1.9 billion
4. Wells Fargo $1.8 billion
5. Intercoastal Mortgage $1.7 billion
6. Chase $1.4 billion
7. Caliber Home Loans $1.4 billion
8. Atlantic Coast Mortgage $1.4 billion
9. U.S. Bank $1.4 billion
10. George Mason Mortgage $1.3 billion

If we focus on home buyers, the list changes quite a bit, both with new names and a new order.

In first was Truist with $2.5 billion funded, not a big surprise as home buyers often turn to banks over nonbank lenders for an important home purchase.

However, Pennymac was a very close second with $2.4 billion funded, followed by McLean Mortgage with $1.9 billion.

Home buyers also seem to like using local options as it probably gives them peace of mind.

In fourth was Wells Fargo with $1.8 billion, and Intercoastal Mortgage rounded out the top five with $1.7 billion.

Others included in the top 10 were Chase, Caliber Home Loans, Atlantic Coast Mortgage, U.S. Bank, and George Mason Mortgage.

They all had surprisingly close home purchase totals to one another.

Top Refinance Lenders in DC (for Existing Homeowners)

Ranking Company Name 2021 Loan Volume
1. Rocket Mortgage $7.1 billion
2. Freedom Mortgage $4.5 billion
3. Pennymac $4.1 billion
4. loanDepot $4.0 billion
5. Wells Fargo $3.1 billion
6. Truist $2.8 billion
7. Mr. Cooper $2.5 billion
8. UWM $2.0 billion
9. Navy FCU $1.9 billion
10. Newrez $1.8 billion

What about existing homeowners looking to a refinance a mortgage? Well, that list was different too.

Like the overall list, Rocket Mortgage was king with $7.1 billion funded. That was a good chunk of their overall volume.

In second was Freedom Mortgage with $4.5 billion, known as a VA loan specialist.

Pennymac took third with $4.1 billion, followed closely by loanDepot with $4 billion and Wells Fargo with $3.1 billion.

The rest of the best included Truist, Mr. Cooper, United Wholesale Mortgage, Vienna, VA-based Navy FCU, and Newrez.

It’s not uncommon for existing homeowners to use out-of-state lenders for a refinance, which sums up this list.

The Best Mortgage Lenders in Washington DC

Now let’s talk about the best mortgage lenders in the District of Columbia based on customer reviews.

As always, I turn to Zillow to check out customer reviews. For DC, it’s a bit unique as none of the lenders are actually in DC.

But they are local companies in nearby states, including Maryland and Virginia.

McLean Mortgage comes in with an excellent 4.99/5 score from nearly 3,000 customer reviews, which is basically unbeatable.

Chevy Chase-based Forbright Bank has the second largest number of reviews (about 1,500) and a 4.82/5 rating. Pretty solid.

Then there’s Bethesda, Maryland’s Presidential Bank and its superior 4.99/5 rating, which is obviously nearly flawless. That’s from about 750 reviews.

McLean-based Aurora Financial has a similar number of reviews but a 4.7/5 rating, while Navy Federal Credit Union has a 4.22/5 from just over 100 reviews.

There’s also Bethesda-based Mortgagestar, which has a perfect 5/5 rating from over 200 reviews and Alexandria, VA-based Potomac Trust Mortgage’s 4.91/5.

So plenty of good options for a home loan in The District. Don’t forget to include local mortgage brokers in your search as well.

Source: thetruthaboutmortgage.com

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If you’re an active duty or veteran homeowner (or aspiring home buyer), chances are you’ve heard of Veterans United Home Loans.

They are the largest VA home purchase lender in the nation. And have been since 2016 (seven consecutive years).

Their specialty is providing financing to veterans looking to buy homes. And about 75% of their overall business consisted of purchase loans.

In 2022, the Missouri-based lender also took the overall lead in the VA lending category.

So chances are they’re pretty knowledgeable when it comes to helping military members buy homes. Read on to learn more.

Veterans United Home Loans Fast Facts

  • Direct-to-consumer mortgage lender
  • Founded in 2002, headquartered in Columbia, Missouri
  • A DBA of Mortgage Research Center, LLC
  • Focuses primarily on VA loans but offers FHA and conventional too
  • Licensed to do business in all 50 states and D.C.
  • The #1 VA lender nationally in 2022
  • Funded $26.5 billion in VA loans last year
  • 30th largest home loan lender overall
  • Has physical branches in 17 states

As noted, Veterans United Home Loans is a juggernaut in the VA lending world, having ascended to the top of the pile in 2022, per HMDA data.

Last year, the company funded more than $31 billion in home loans, with about 95% of it VA loans.

They also doled out nearly $2 billion in conventional loans, FHA loans, and even some USDA loans. But they’re clearly best known for being a VA loan lender.

Veterans United acts as a direct-to-consumer retail mortgage lender, offering both home purchase loans and refinances.

The company got its start all the way back in 2002 and is headquartered in Columbia, Missouri.

Since inception, they’ve closed more than 500,000 VA loans with the help of many former military members that make up their staff.

The company also recently hired hilarious movie star (and former member of the United States Marine Corps Reserve) Rob Riggle as a spokesperson.

At last count, they also have physical branch locations in 17 states nationwide.

The company operates a network of Veteran-friendly real estate agents known as Veterans United Realty.

And offers credit consulting to help borrowers improve their credit scores to help qualify for a home loan.

How to Apply with Veterans United

To get started, you can call them directly, head to their website, or go to a physical branch if one is located nearby.

If you go the online route, they’ve got a quote generator that asks a series of questions, then puts you in touch with a loan officer.

From there, you can check eligibility, gather pricing, and eventually complete a VA loan application electronically.

Once your loan is submitted, you’ll be able to manage your application via myVeteransUnited.

The dashboard allows you to securely upload documents, sign forms and disclosures electronically, monitor your progress, get in touch with your lending team, and more.

They also offer a free smartphone app that allows you to get pre-approved for a mortgage, view your to-do list, or upload photos of requested documents.

All in all, they make it easy to get through the home loan process, and are well-versed in both VA eligibility and financing protocol overall.

This means you should be paired with knowledgeable staff, while having flexibility in terms of how you complete the loan process.

Loan Programs Offered by Veterans United

  • Home purchase loans
  • Refinance loans (IRRRL and VA cash out)
  • Jumbo VA loans
  • VA Energy Efficient Mortgages
  • Loans for first-time home buyers
  • FHA loans
  • Conventional loans (non-gov)

Veterans United offers both home purchase loans (their specialty) and refinance loans.

This includes the VA Interest Rate Reduction Refinance Loan (IRRRL), the VA cash out refinance, and even the VA Energy Efficient Mortgage (EEM).

You can also get a jumbo VA loan if purchasing or refinancing in an expensive region of the country.

Eligible property types include primary single-family homes, VA-approved condos, multi-unit properties, and even modular homes.

While they don’t seem to market non-VA loans, they did originate nearly $2 billion in conventional loans, FHA loans, and USDA loans last year.

So my assumption is they also offer those types of loans alongside their core VA offerings.

In terms of qualifying, they appear to require a minimum 620 FICO score, which might be a hurdle for some.

While the VA doesn’t have a minimum credit score, some lenders are more liberal than others. For example, Rocket Mortgage allows scores down to 580 for VA loans.

If your scores are below their minimum requirement, the company’s credit consulting group might be able to assist.

Veterans United says it does not lend on manufactured homes, nor does it offer VA construction loans.

With regard to loan type, they only offer fixed-rate mortgages, such as a 30-year fixed or 15-year fixed.

No second mortgages or home equity loans/lines are offered.

Veterans United Mortgage Rates

One nice thing about Veterans United transparency-wise is they list their daily mortgage rates online.

So you don’t have to guess how competitive they are – simply head to their website and click on the “VA loan rates” link.

You’ll see daily rates for a 30-year fixed VA purchase loan and 30-year fixed VA refinance loan, along with the discount points required.

If you want to fine-tune rates, they allow you to customize your rate based on credit score.

For more accurate and robust pricing, reach out to a licensed loan officer for a quote.

While they do publicize their mortgage rates, it’s unclear what lender fees they charge.

Pay close attention to your quoted APR and read your loan estimate to see what lender fees are charged, if any.

Some lenders charge a loan origination fee and/or fees for underwriting, processing, etc., while others do not.

Take the time to compare their quote to other lenders, both those that specialize in VA loans and perhaps those that don’t. You can also include mortgage brokers in your comparison shopping.

Veterans United Reviews

Veterans United has no shortage of customer reviews.

Over at Trustpilot, Veterans United has an “excellent” 4.9/5 rating from nearly 10,000 customer reviews.

And at Zillow, a very good 4.78/5-star rating from over 5,100 customer reviews.

On Google, they’ve got a 4.8/5 rating from roughly 4,500 reviews, and a perfect 5.0 on Bankrate from 3,300 reviews.

What’s more impressive is 100% of reviewers on Bankrate would recommend them to others.

At LendingTree, they have a 5/5 score from 3,100+ reviews, a 99% recommended score, and landed in the top-10 for customer satisfaction in Q4 2022.

If that’s not enough, they’ve got a 4.9 out of 5 from nearly 3,000 reviews on Credit Karma.

They also have over 346,000 reviews on their own website, with a 4.8 out of 5 average satisfaction rating and a 98% recommend score.

Lastly, they are a Better Business Bureau (BBB) accredited company, and currently hold an ‘A+’ rating based on complaint history.

However, they have had 150 complaints over the past 3 years, per the BBB website.

On the upside, they have a 4.82/5 rating on the BBB website based on nearly 2,500 customer reviews, which is a pretty solid score.

To sum things up, Veterans United is probably one of the most experienced VA home loan lenders out there, especially when it comes to purchase loans.

But take the time to comparison shop and don’t overlook rates and fees, which can stay with you a lot longer than the month or two it takes to close on a mortgage.

Veterans United Pros and Cons

The Good

  • Can apply online, by phone, or at a branch
  • Offers a digital, mostly paperless mortgage experience
  • All major VA loan types available (and non-VA loans as well)
  • Displays their daily mortgage rates online
  • Excellent customer reviews across many ratings websites
  • A+ BBB rating, accredited company
  • Free smartphone app

The Maybe Not

  • Doesn’t lend on manufactured housing
  • No ARMs, second mortgages, or VA construction loans
  • Requires a minimum 620 FICO score
  • Physical branches located in just 17 states
  • Unclear what lender fees are charged

Source: thetruthaboutmortgage.com

Apache is functioning normally

The average cost of homeowners insurance in Mississippi is $2,510 per year, or about $210 per month, according to a NerdWallet analysis. That’s considerably higher than the national average of $1,820 per year.

We’ve analyzed rates and companies across the state to find the best homeowners insurance in Mississippi. Our sample rates are for a homeowner with good credit and $300,000 dwelling coverage, $300,000 liability coverage, and a $1,000 deductible. But, of course, your rates will be different.

Note: Some insurance companies in this article may have changed their underwriting practices and no longer issue new policies in your state.

Why you should trust NerdWallet

Our writers and editors follow strict editorial guidelines to ensure fairness and accuracy in our writing and data analyses. You can trust the prices we show you because our data analysts take rigorous measures to eliminate inaccuracies in pricing data and may update rates for accuracy as new information becomes available.

We include rates from every locale in the country where coverage is offered and data is available. When comparing rates for different coverage amounts and backgrounds, we change only one variable at a time, so you can easily see how each factor affects pricing.

Our sample homeowner had good credit, $300,000 of dwelling coverage, $300,000 of liability coverage and a $1,000 deductible.

The best homeowners insurance in Mississippi

If you’re looking to buy homeowners insurance from a well-rated national brand, consider one of these insurers from NerdWallet’s list of the Best Homeowners Insurance Companies.

More about the best home insurance companies in Mississippi

See more details about each company to help you decide which is best.

State Farm

Well-established insurer with a lengthy list of coverage options.

Coverage options

More than average

Average set of discounts

NAIC complaints

Fewer than expected

State Farm

Well-established insurer with a lengthy list of coverage options.

Coverage options

More than average

Average set of discounts

NAIC complaints

Fewer than expected

State Farm is a great choice for homeowners who like to work directly with a company representative, as the company sells policies through a vast network of agents. And its attention to customer service has paid off; the company has fewer customer complaints to state regulators than expected for a company of its size.

State Farm offers a free Ting device as a perk for home insurance policyholders. Ting is a smart plug that monitors your home’s electrical network to help prevent fires.

Farmers

Those seeking benefits like diminishing deductibles and claims forgiveness may want to consider Farmers.

Coverage options

More than average

Average set of discounts

NAIC complaints

Fewer than expected

Farmers

Those seeking benefits like diminishing deductibles and claims forgiveness may want to consider Farmers.

Coverage options

More than average

Average set of discounts

NAIC complaints

Fewer than expected

Homeowners policies from Farmers may include two valuable types of insurance: extended dwelling and replacement cost coverage. Extended dwelling coverage gives you extra insurance for the structure of your house, while replacement cost coverage offers higher reimbursement for stolen or destroyed belongings.

Some Farmers policies also come with perks that can save you money. For example, with claim forgiveness, Farmers won’t raise your rate for a claim as long as you haven’t filed one within the past five years.

Nationwide

For shoppers seeking a broad range of coverage options, Nationwide may fit the bill.

Coverage options

More than average

Great set of discounts

NAIC complaints

Close to expected

Nationwide

For shoppers seeking a broad range of coverage options, Nationwide may fit the bill.

Coverage options

More than average

Great set of discounts

NAIC complaints

Close to expected

We like Nationwide for its wide variety of coverage options. For example, its standard homeowners insurance policy generally includes ordinance or law coverage, which can help pay to bring your home up to current building codes after a covered claim. In addition, you can add other coverage for things like identity theft and damage from backed-up sewers and drains.

Depending on how much personal assistance you need, you can get a quote for homeowners insurance on the Nationwide website or work with a local agent instead. You can also use the website to pay bills, file claims or check claim status.

USAA

Offers perks and affordable rates for the military community.

Coverage options

Below average

Average set of discounts

NAIC complaints

Far fewer than expected

USAA

Offers perks and affordable rates for the military community.

Coverage options

Below average

Average set of discounts

NAIC complaints

Far fewer than expected

USAA sells homeowners insurance to veterans, active military and their families. If you fall into one of those groups, you might want to look into USAA’s offerings. The company’s homeowners policies include some unique perks, such as deductible-free coverage for military uniforms and coverage for identity theft.

Homeowners in Mississippi can participate in the company’s Connected Home program, which gives you a discount on your policy if you buy and install approved smart home devices. These include water leak sensors, cameras and thermostats.

How much does homeowners insurance cost in Mississippi?

The average annual cost of home insurance in Mississippi is $2,510. That’s 38% more than the national average of $1,820.

In most U.S. states, including Mississippi, many insurers use your credit-based insurance score to help set rates. Your insurance score is similar but not identical to your traditional credit score.

In Mississippi, those with poor credit pay an average of $5,640 per year for homeowners insurance, according to NerdWallet’s rate analysis. That’s more than twice as much as those with good credit.

Average cost of homeowners insurance in Mississippi by city

How much you pay for homeowners insurance in Mississippi depends on where you live. For instance, the average cost of home insurance in Jackson is $2,815 per year, while homeowners in Gulfport pay $3,650 per year, on average.

Average annual cost

Average monthly cost

Greenville

Hattiesburg

Ocean Springs

Olive Branch

Starkville

The cheapest home insurance in Mississippi

Here are the insurers we found with average annual rates below the Mississippi average of $2,510.

What to know about Mississippi homeowners insurance

Mississippi sees a wide range of severe weather that homeowners should consider when shopping for the best homeowners insurance in the state.

Hurricanes

On the Gulf of Mexico, Mississippi is vulnerable to hurricanes. These fierce storms can cause damage from strong winds, storm surge and flooding. If you’re in a coastal area, ensure you have enough wind and flood damage coverage. Read more about hurricane insurance.

Wind damage is typically included in a standard homeowners insurance policy. However, residents of coastal areas may have windstorm exclusions or a separate wind deductible. These are often a flat rate, such as $1,000 or a percentage of your dwelling coverage. For example, your policy may have a $1,000 deductible for most claims and a 1% deductible for hail or wind claims. So if your house has $250,000 worth of dwelling coverage, you’d have to pay for the first $2,500 of hail damage yourself.

If wind damage is not covered in your policy, you may be able to purchase separate wind coverage from the “windpool,” or the Mississippi Windstorm Underwriting Association.

Flooding

Flooding is a common hazard in Mississippi, particularly in areas near rivers or other bodies of water or due to hurricanes and tropical storms. Flood damage is not typically covered by standard homeowners insurance; you’ll need to buy a separate flood insurance policy.

To find out if you’re at risk, check out the Federal Emergency Management Agency’s flood maps or visit RiskFactor.com, a website from the nonprofit First Street Foundation. Even if your property is deemed low risk, it may be worthwhile to purchase flood insurance for extra peace of mind.

Remember that while you can purchase flood coverage anytime, there’s typically a 30-day waiting period before the insurance takes effect. Here’s more information about flood insurance and waiting periods.

Tornadoes

Tornadoes are not uncommon in Mississippi, and they seem to be increasing in frequency. The past five years have averaged 86 tornadoes a year, up from an average of 33 a year. Much like hurricanes, the force of wind from these storms can cause significant damage to homes.

Thankfully, standard homeowners insurance will cover tornado damage, but you’ll still want to review your policy carefully. There may be a separate deductible for wind damage, as described in the hurricane section.

Thunderstorms

Severe thunderstorms that produce hail are common in Mississippi. In 2022, there were 108 reports of hail-producing thunderstorms. Hail can cause significant damage to roofs, windows, and siding. The good news for homeowners is that hail damage is often covered by standard policies.

However, as with wind damage, you may have a separate deductible for hail claims, so read your policy carefully to ensure you know what’s covered.

Mississippi insurance department

The Mississippi Insurance Department oversees the state’s insurance industry and provides consumer protection and resources. For example, its website includes guides to shopping for homeowners insurance in Mississippi, a hurricane insurance checklist and other disaster preparedness information.

You can file a complaint against your insurance company with the Mississippi Insurance Department; you can do so by mail, fax or online form. If you have questions about filing a complaint or need help, you can request assistance by email at [email protected] or toll-free at 800-562-2957.

Amanda Shapland contributed to this story.

Frequently asked questions

Is homeowners insurance required in Mississippi?

Homeowners insurance isn’t legally required in Mississippi, but your mortgage lender may require you to buy it.

Does Mississippi homeowners insurance cover flooding?

A standard homeowners policy typically doesn’t cover flooding. That means you may want to buy separate flood insurance if your home is in a high-risk area. Learn how to find the best flood insurance.

How can I save money on home insurance in Mississippi?

There are several ways to save money on homeowners insurance in Mississippi:

  • Shop around to make sure you’re getting the best rate.

  • Choose a higher deductible. In case of any claims, you’ll pay more out of pocket, but your premiums will be lower.

Source: nerdwallet.com

Apache is functioning normally

It’s time to check out the top mortgage lenders in Georgia based on their 2021 loan volume.

These mortgage companies outranked more than one thousand other lenders to take the top honors.

Overall, about $160 billion in home loans was funded in The Peach State last year, making it one of the bigger states volume-wise nationwide.

And taking the #1 spot was Rocket Mortgage, also the nation’s largest mortgage lender.

Read on to see which other companies ranked in the top 10.

Top Mortgage Lenders in Georgia (Overall)

Ranking Company Name 2021 Loan Volume
1. Rocket Mortgage $12.2 billion
2. Pennymac $6.6 billion
3. Wells Fargo $5.3 billion
4. Truist $4.7 billion
5. UWM $4.7 billion
6. Ameris Bank $4.0 billion
7. Newrez $3.9 billion
8. Freedom Mortgage $3.8 billion
9. AmeriHome Mortgage $3.5 billion
10. Fairway Independent $3.1 billion

Detroit-based Rocket Mortgage, the nation’s biggest mortgage lender, originated an impressive $12.2 billion in home loans in Georgia last year.

That was nearly double their nearest competitor, Pennymac, per HMDA data from advisory company Richey May.

SoCal based Pennymac funded about $6.6 billion in the state last year, and only about a third of it came via the retail channel.

They mostly dole out loans via the correspondent lending channel (via smaller banks and credit unions), and through mortgage brokers in the wholesale channel.

In other words, your loan may have been originated by a different company, but backed by Pennymac.

In third was San Francisco-based Wells Fargo with $5.3 billion funded, another good showing despite their controversies.

They were followed closely by Truist Financial and United Wholesale Mortgage (UWM), both with about $4.7 billion funded.

In sixth was Atlanta, Georgia’s own Ameris Bank with a healthy $4 billion in home loan volume.

Newrez was a close seventh with $3.9 billion, followed by Freedom Mortgage, AmeriHome, and Fairway Independent Mortgage.

Top Mortgage Lenders in Georgia (for Home Buyers)

Ranking Company Name 2021 Loan Volume
1. Pennymac $3.5 billion
2. Rocket Mortgage $2.6 billion
3. Ameris Bank $2.4 billion
4. UWM $2.3 billion
5. Homestar Financial $2.2 billion
6. Truist $2.1 billion
7. Fairway Independent $2.1 billion
8. Wells Fargo $1.9 billion
9. Newrez $1.9 billion
10. AmeriHome Mortgage $1.9 billion

If we consider only home purchase lending, the list changes quite a bit and new names surface.

Pennymac was the #1 home purchase lender in Georgia with $3.5 billion funded, followed by Rocket Mortgage with $2.6 billion.

Ameris Bank took third with $2.4 billion, meaning about 60% of their total mortgage business is home purchase loans.

In fourth was UWM with $2.3 billion, followed by Gainesville, GA-direct lender Homestar Financial with $2.2 billion in origination volume.

Others in the top 10 included Truist Financial, Fairway Independent, Wells Fargo, Newrez, and AmeriHome.

Top Refinance Lenders in Georgia (for Existing Homeowners)

Ranking Company Name 2021 Loan Volume
1. Rocket Mortgage $9.5 billion
2. Freedom Mortgage $3.3 billion
3. Pennymac $3.1 billion
4. Wells Fargo $3.1 billion
5. UWM $2.4 billion
6. Truist $2.2 billion
7. loanDepot $2.2 billion
8. Mr. Cooper $2.0 billion
9. Newrez $2.0 billion
10. Better Mortgage $1.8 billion

Now let’s talk about the biggest refinance lenders in Georgia. As expected, Rocket Mortgage absolutely dominated with $9.5 billion funded.

That was nearly triple second place Freedom Mortgage’s $3.3 billion, a testament to how active they are in the state.

In third was Pennymac with $3.1 billion, followed closely by Wells Fargo with roughly the same amount funded.

In fifth was UWM with $2.4 billion, a strong showing since they only work with mortgage brokers via the wholesale channel.

The rest of the top 10 included Truist Financial, loanDepot, Mr. Cooper, Newrez, and struggling lender Better Mortgage.

Top Mortgage Lenders in Atlanta

Ranking Company Name 2021 Loan Volume
1. Rocket Mortgage $8.7 billion
2. Pennymac $4.2 billion
3. Wells Fargo $4.0 billion
4. UWM $3.7 billion
5. Truist $3.7 billion
6. Ameris Bank $3.1 billion
7. Newrez $3.1 billion
8. AmeriHome Mortgage $2.6 billion
9. Freedom Mortgage $2.4 billion
10. loanDepot $2.4 billion

Top Mortgage Lenders in Augusta

Ranking Company Name 2021 Loan Volume
1. Rocket Mortgage $432 million
2. Pennymac $429 million
3. Queensborough National $326 million
4. Freedom Mortgage $249 million
5. Veterans United $233 million
6. Centerstate Bank $230 million
7. Wells Fargo $227 million
8. Truist $221 million
9. New American Funding $214 million
10. U.S. Bank $180 million

Who Are Georgia’s Best Mortgage Lenders?

I typically head over to Zillow and check customer reviews to determine which mortgage companies are faring best in a particular state.

Here’s what I found for Georgia. Atlanta-based AmeriSave has a 4.68/5 rating from over 2,400 reviews. Not the best rating, but the most reviews by far.

Then there’s Atlanta’s Silverton Mortgage, which has a superior 4.94/5 rating from about 1,200 reviews.

Even better is Ameris Bank’s 4.95/5 rating from nearly 900 customer reviews, and fellow Atlanta lender First Option Mortgage’s 4.97/5 from about 1,000 reviews.

Honorable mention goes to Capital City Home Loans and its 4.96/5 score from 300 reviews.

As for the big, national brands, Rocket has a 4.48/5, Pennymac a 4.4/5, and Wells Fargo a 4.95/5.

So it appears there are plenty of solid options, whether you use a local, Georgia-based mortgage lender or a national brand.

Also be sure to check out some local mortgage brokers to see what they can offer.

(photo: sailn1)

Source: thetruthaboutmortgage.com

Apache is functioning normally

Depending on the loan amount you need and where you’re buying a home in New Jersey, you may find it difficult to find financing beyond the conforming loan limits. If this is the case, you may need a jumbo loan.

What is a jumbo loan?

So, what exactly is a jumbo loan in New Jersey? It’s a mortgage loan that allows homebuyers to finance a property that exceeds the conforming loan limit set by the FHFA. In simpler terms, a jumbo loan is a specialized mortgage that enables you to borrow more money than you would be able to with a conventional loan. These loans are typically used to finance high-end or luxury properties in areas with high home prices.

If the loan amount needed is more than the conforming loan limit (CLL), you’ll need a jumbo loan. New Jersey jumbo loans allow you to borrow more money to buy a more expensive home, but they also come with higher interest rates and stricter requirements than conventional loans.

What is the jumbo loan limit in New Jersey?

In 2023, the conforming loan limit for a single-family home in most U.S. markets is $726,200. However, this limit can be higher in areas where the median home price is significantly above the national average. 

  • $726,200 is the conforming loan limit in most New Jersey counties
  • $1,089,300 is the maximum limit in higher-cost counties

Keep in mind that the loan amount is what determines whether or not you’ll need a jumbo loan, not the price of the home you’re buying. So, if you were to put $50,000 down on a $750,000 home in Salem County, the loan would be $700,000, which is under the CLL for this area. In this case, your loan wouldn’t be considered a jumbo loan.

The following counties in New Jersey have a conforming loan limit beyond $726,200 for 2023:

County FHFA Conforming Loan Limit
Bergen County $1,089,300
Essex County $1,089,300
Hudson County $1,089,300
Hunterdon County $1,089,300
Middlesex County $1,089,300
Monmouth County $1,089,300
Morris County $1,089,300
Ocean County $1,089,300
Passaic County $1,089,300
Somerset County $1,089,300
Sussex County $1,089,300
Union County $1,089,300

You can find the conforming loan limits for your county by using this FHFA map. 

What are the requirements for a jumbo loan in New Jersey?

To qualify for a jumbo loan in New Jersey, borrowers must meet stricter requirements than they would for a conforming loan. The specific requirements can vary from lender to lender, but below are the typical requirements for borrowers seeking a jumbo loan.

Higher credit score: In order to be eligible for a jumbo mortgage, lenders generally expect applicants to have a credit score of at least 720. While some lenders may consider a score as low as 660, a credit score of less than that is typically not accepted.

Larger down payment: Jumbo loans typically require larger down payments than traditional mortgages. Generally, mortgage lenders require a down payment of at least 20% of the home’s purchase price to qualify for a jumbo loan. However, some lenders may require a higher percentage, depending on the borrower’s creditworthiness and overall financial situation. It’s worth noting that larger down payments can help to reduce monthly mortgage payments, as well as overall interest costs over the life of the loan.

More assets: During the asset review process, lenders typically request that jumbo loan borrowers provide evidence of sufficient liquid assets or savings to cover the equivalent of one year’s worth of loan payments.

Lower debt-to-income ratio (DTI): To qualify for a jumbo loan in New Jersey, lenders typically look for a debt-to-income (DTI) ratio of no higher than 43%, and ideally closer to 36%. The DTI is calculated by dividing the sum of all monthly debt payments by the borrower’s gross monthly income. This requirement ensures that borrowers have a strong ability to repay their loan and manage their debt.

Additional home appraisals: When you buy a home in New Jersey, a mortgage lender will require a home appraisal to confirm that the property’s value is equal to or higher than the loan amount. In some cases, a lender may require an additional appraisal for a jumbo loan. In cities with very few comparable property sales, the cost of the appraisal may be higher than in places with more frequent sales.

Source: redfin.com

Apache is functioning normally

Image by Getty Images/Illustration by Bankrate

If you’re buying a home in need of some work, you can get the financing for both the purchase and renovation through an FHA 203(k) loan, also known as a rehab loan. This type of FHA loan keeps things simple with one loan, one set of closing costs and one monthly mortgage payment. Here is Bankrate’s guide to the best 203(k) rehab mortgage lenders in 2023.

Best FHA 203(k) rehab mortgage lenders

LowRates.com

LowRates.com mortgage review

Availability Available in 48 U.S. states (not available in GA or MA)
Loans offered Conventional, jumbo, FHA, VA, USDA
Credit requirements 620 for conventional loans; 700 for jumbo loans; 500 for FHA and VA loans
Down payment minimum 3% for conventional loans; 3.5% for FHA loans; none for VA and USDA loans
Where to find Online
  • No fees
  • Can close as fast as 20 days
  • Offers HELOCs and home equity loans

New American Funding

New American Funding mortgage review

Availability Available in all U.S. states
Loans offered Conventional, jumbo, FHA, VA, USDA, fixed-rate, adjustable-rate; rate-and-term, cash-out and streamline refinancing; home equity line of credit (HELOC); investment property; flex-term; non-QM; reverse mortgages
Credit requirements 620 for conventional loans
Down payment minimum Undisclosed
Where to find Online and in-person
  • Offers initiatives for borrowers of color
  • Diverse set of loan offerings

Guaranteed Rate

Guaranteed Rate mortgage review

Availability Nationwide
Loans offered Purchase and refinance, conventional, jumbo, FHA, VA, USDA, renovation loans, interest-only
Credit requirements 620 for conventional and FHA loans; 580 for VA loans
Down payment minimum Undisclosed
Where to find Online and in-person
  • Over 350 locations nationwide for in-person support
  • Interest rates listed online and updated daily
  • Rated as a top 3 retail mortgage lender by Scotsman Guide

Flagstar Bank

Flagstar Bank mortgage review

Availability Available in more than two dozen states
Loans offered Purchase and refinance; conventional, jumbo, FHA, VA, USDA, home equity loan, construction and renovation loans
Credit requirements 620 for conventional loans; 700 for jumbo loans; 580 for FHA loans
Down payment minimum Unclear for conventional loans; 3.5% for FHA loans
Where to find Online and in-person
  • Offers several government-backed loan products with competitive rates
  • “Destination Home” Mortgage with no down payment and flexible eligibility criteria
  • Get up to $5,000 towards closing costs or your down payment with the Flagstar Gift Program

LoanDepot

LoanDepot mortgage review

Availability Available in all U.S. states
Loans offered Purchase and refinance; conventional, jumbo, FHA, VA, construction and renovation loans
Credit requirements 620 for conventional loans and VA loans; 700 for jumbo loans; 580 for FHA loans
Down payment minimum Unclear for conventional loans; 3.5% for FHA loans
Where to find Online and in-person
  • More than 1,700 licensed lending officers nationwide for customer support
  • Accredited by the Better Business Bureau (BBB) with an A+ rating

Fairway Independent Mortgage Corporation

Fairway Independent Mortgage Corporation review

Availability Available in all U.S. states
Loans offered Purchase and refinance; conventional, jumbo, FHA, VA, USDA; construction and renovation loans, reverse mortgage, physician loan
Credit requirements Unavailable
Down payment minimum 5% for conventional loans; 3.5% for FHA loans
Where to find Online and in-person

Summary: Best FHA 203(k) mortgage lenders

Lender Credit requirements Down payment minimum Bankrate review
LowRates.com 620 for conventional loans; 700 for jumbo loans; 500 for FHA and VA loans 3% for conventional loans; 3.5% for FHA loans; none for VA and USDA loans LowRates.com mortgage review
New American Funding 620 for conventional loans Undisclosed New American Funding mortgage review
Guaranteed Rate 620 for conventional and FHA loans; 580 for VA loans Undisclosed Guaranteed Rate mortgage review
Flagstar Bank 620 for conventional and FHA loans; 580 for VA loans Unclear for conventional loans; 3.5% for FHA loans Flagstar Bank mortgage review
LoanDepot 620 for conventional loans and VA loans; 700 for jumbo loans; 580 for FHA loans Unclear for conventional loans; 3.5% for FHA loans LoanDepot mortgage review
Fairway Independent Mortgage Corporation Unavailable 5% for conventional loans; 3.5% for FHA loans Fairway Independent Mortgage review

What is an FHA 203(k) rehab loan?

The FHA 203(k) loan is a type of mortgage backed by the Federal Housing Administration (FHA) for homebuyers looking to renovate the home they’re purchasing. 203(k) loans tend to come with more competitive rates, and require a smaller down payment and lower credit score compared to other kinds of loans. Like other FHA mortgages, 203(k) loans require you to pay a mortgage insurance premium with your monthly loan payment.

How does a 203(k) loan work?

A 203(k) loan bundles your mortgage and renovation funds into one loan. Once you close on the loan, a portion of the loan proceeds is paid to the seller of the home, and the remaining balance goes toward the renovations.

To be eligible for a 203(k) loan, the home needs to be at least one year old and renovation costs need to be a minimum of $5,000. In addition, the amount borrowed can’t be more than the area’s FHA loan limit, the home’s value after the renovation or its value before renovation, whichever is lowest.

You also can’t use a 203(k) loan for just any project. You’ll need to comply with the requirements for eligible renovations, which include replacing the roof and floors, enhancing the home for accessibility reasons or making energy efficiency improvements.

Who qualifies for a 203(k) loan?

If you’re interested in a 203(k) loan, you’ll need to meet the same requirements for a standard FHA loan:

  • A minimum credit score of 580
  • A debt-to-income (DTI) ratio of 50 percent or less (individual lenders may have higher or lower requirements)
  • The home is your primary residence and passes inspection once renovations are completed

Methodology

To determine the best FHA 203(k) rehab mortgage lenders, Bankrate evaluated lenders based on several criteria, including affordability (APR, discounts and/or incentives); scope of loan offerings; customer reviews; and online capabilities.

Source: thesimpledollar.com