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Carrington Mortgage Review 2018

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by Nina Semczuk Updated
Carrington
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Our Rating: 3.1/5
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Carrington Mortgage Overview

Carrington Mortgage Services, founded in 2007, is a non-bank mortgage lender and servicer headquartered in Anaheim, California. Known primarily as a loan servicer, Carrington offers homebuyers most loan options, including FHA, VA, jumbo, USDA and conventional loans along with refinance options. The company originates loans in all states except Massachusetts and North Dakota and has branch locations in 20 states. 

Today's Rates

National Average Rates

Product Today Last Week Change
30 year fixed 4.68% 4.69% -0.01
15 year fixed 4.17% 4.19% -0.02
5/1 ARM 4.29% 4.12% +0.17
30 yr fixed mtg refi 4.65% 4.63% +0.02
15 yr fixed mtg refi 4.16% 4.17% -0.01
7/1 ARM refi 4.44% 4.39% +0.05
15 yr jumbo fixed mtg refi 4.35% 4.26% +0.09

National Mortgage Rates

Source: Freddie Mac Primary Mortgage Market Survey, SmartAsset Research

Regions Served by Carrington

Does Carrington Mortgage Operate in My Area?

Carrington Mortgage is licensed in every state except Massachusetts and North Dakota. You can find offices in the following states: Arizona, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Kentucky, Maryland, Michigan, Missouri, Nevada, Ohio, Oregon, South Carolina, Tennessee, Texas and Virginia.

What Kind of Mortgage Can I Get With Carrington Home Loans? 

Carrington Home Loans offers all three of the major government-backed home loan options as well as two low down payment options unique to the company. While you’ll find a number of home loan and refinance options, all terms are fixed rate. That means if you’re looking for an adjustable-rate mortgage, you’ll have to find another lender, as it’s not an option at Carrington. 

Conventional: A conventional loan has the highest qualification standards. You’ll need a good credit score and low debt-to-income ratio to qualify for the lowest rates and best terms. Carrington offers fixed-rate loans in 30-year or 15-year terms. A fixed-rate loan has the same interest rate over the life of the loan. That means your monthly principal and interest payments will stay the same over the course of your mortgage.   

Jumbo loan: Any loan above the conventional loan limits set by Fannie Mae and Freddie Mac is considered a jumbo loan. Current limits are $453,100 to $679,650 (depending on where the property is located). You can finance up to 80% of the loan, that means you have to have a 20% down payment for a jumbo loan. Carrington can lend up to $2.5 million with a jumbo loan.  

VA loan: The Department of Veterans Affairs backs this loan available to qualified veterans, service members and select spouses. VA loan features include no down payment required, no private mortgage insurance requirement and favorable terms. At Carrington, you can have a credit score as low as 500 but the only term available is a 30-year fixed-rate loan.  

Federal Housing Administration (FHA) loan: This government-backed home purchase loan helps those with low credit scores achieve homeownership. Carrington qualifies borrowers with credit scores as low as 500. FHA loans allow you to put down as little as 3.5%. However, you are subject to a version of mortgage insurance when you don’t put at least 20% down. The FHA calls it mortgage insurance premium (MIP) and upfront mortgage insurance premium (UFMIP).

United States Department of Agriculture (USDA) loan: If you have a low income and you’re trying to buy a home in a rural area, a USDA loan may be your best option. This government-back home loan is for low-income households and has no down payment requirement. Carrington accepts borrowers with at least a 550 credit score for this loan.  

Home Possible: You can have a down payment as low as 5% for this home loan, offered in 15-year and 30-year fixed rate terms. The home has to be your primary residence and you need at least a 620 FICO credit score to qualify for this loan. 

Home Possible Advantage: This loan has the same requirements and loan terms as the Home Possible loan but allows you to have a 3% down payment. 

Down payment assistance programs: Carrington partnered with 53 down payment assistance programs in 13 states to help eligible borrowers fund down payments and closing costs associated with a home purchase. Eligibility requirements vary depending on state and county, but generally, the programs are aimed at low-income homebuyers and first-time homebuyers. 

Refinance: If you’re trying to lower your current mortgage payment, want to remodel your home or would like to cash out your mortgage, this lender offers refinance options for each goal.

What Can You Do Online With Carrington?

Carrington’s website is not very impressive. It’s hard to navigate, there’s no search bar, you can’t prequalify online and useful information is hidden. The tools and resources provided are very basic, and you can’t find any mortgage rates. That means if you want current information, you’re forced to call the company. Unlike the Carrington Mortgage Services’ website (the servicing division of the company), Carrington Home Loans doesn’t have a live chat option for questions. However, there is a help center with a number of frequently asked questions and answers. 

Online prequalification isn’t an option. The prequalification links on the website lead you to a contact form where you fill out your information so that a Carrington agent can call or email you. As for filling out the mortgage application itself, again, you’ll have to contact an agent to get you started. Unlike other mortgage lenders, Carrington doesn’t offer a mobile site or application for you to use to track your loan progress. Overall, the company seems at least several years behind its competition in regards to technology. 

Would You Qualify for a Mortgage From Carrington Home Loans?

According to Ray Brousseau, the company’s president, Carrington prides itself on filling the home loan needs of underserved borrowers. Almost half of its home loans are for those who typically wouldn’t qualify for a mortgage with a larger lender.  

One of the first factors in mortgage qualification is your FICO credit score. Carrington accepts credit scores as low as 500 for FHA loans, 550 for USDA loans and 500 for VA loans. Conventional loan credit score guidelines aren’t set in stone, but in general, most lenders prefer closer to the high 600s to 700s. Overall, Carrington has some of the lowest credit score requirements of all the lenders SmartAsset has reviewed. The firm is a direct mortgage lender and servicer, rather than a broker. That means the company can underwrite loans that banks or lenders that act as middlemen wouldn’t generally be able to. 

In addition to credit score, your debt-to-income ratio (DTI) is used to gauge your financial situation. Expressed as a percentage, the figure allows your lender to get an idea of how much money you have available after paying your monthly debts. You can find yours by adding up all your monthly debt payments, plus your projected monthly mortgage payment and dividing by your pre-tax monthly income. While Carrington doesn’t specify maximum percentages, the best rates generally available to those with 36% DTI or less. VA and USDA loan limits are generally around 41% and FHA are around 43%. 

Depending on the type of loan you’re applying for, down payment savings are another consideration. VA and USDA loans require 0% down, but FHA loans require at least 3.5% and conventional require at least 5%, 20% to avoid private mortgage insurance. Even if the loan you’re applying for doesn’t require down payment savings, you still need to have some savings for closing costs, the VA funding fee and other incidentals. Ideally, you’ll also have enough to cover the first few months of mortgage payments as well. 

What’s the Process for Getting a Mortgage With Carrington Home Loans?

You can kick off the process by calling Carrington or by visiting one of the lender’s retail locations. You’ll speak to a loan officer who can will ask you a number of questions for prequalification, including home location, price, your down payment, your income and work history and your Social Security number for a credit score check.

If you’re ready to apply for a mortgage rather than just prequalify, you can get started on the application with the help of a representative. You need to provide personal information and financial paperwork to complete the application. Carrington’s mortgage document checklist includes:

  • The signed home purchase agreement
  • Your tax returns for the past two years
  • Current pay stub and two years of W-2s
  • Cancelled checks for verification of your current rent or mortgage
  • Two months of personal bank statements
  • Asset statements, including 401(k), brokerage accounts, mutual funds, etc
  • Signed loan application
  • Identification (such as your driver's license) and Social Security card

After your lender receives all the information, your loan will be processed and then underwritten if you’re qualified. You’ll need to arrange mortgage insurance if your conventional home loan down payment is less than 20%. After this stage, you’re in pre-closing. This is when title insurance is ordered and your lender schedules a closing date. 

Closing is the last step. This is when you sign the final paperwork, the loan is funded by your lender and you get keys to the home. 

How Carrington Home Loan Stacks Up

This lender has some of the lowest credit score requirements we’ve seen. That means the company stands by its mission to help underserved homebuyers secure property. Carrington also offers a wide array of loan options, including VA, USDA, FHA, conventional and its own low down payment home loan option. All these factors point to Carrington’s ideal homebuyer as someone who wouldn’t traditionally qualify for a loan at a larger or stricter lender.

It is also one of the few lenders we’ve profiled that services the loans it originates. Most lenders (such as USAA, Better Mortgage and Lenda) will originate a loan only to sell it to a servicer after it closes. That means your relationship is transferred to another entity, rather than the company you’ve worked with from the start. 

Speaking to the downsides, Carrington Home Loan isn’t very transparent about its mortgage rates. You can’t find any examples on the company’s website, and overall, the website is not as functional as its competitors. You can’t prequalify or apply online; you have to speak with a representative to get started, and there’s no mobile app to use during the loan process. The site also doesn’t include features as basic as a search bar. That means the user experience can be frustrating if you’re looking to find specific information on your own. You’re forced to call the company. The mortgage calculator is also very basic and doesn’t include any tailored results, such as Carrington mortgage rates after you plug your information into the tool.

Carrington seems best for those willing to contend with a somewhat analog process, those who have low credit scores or those who want to have the same originator and servicer. If you’d rather use an online-based, transparent company for your purchase loan, you have plenty of options, including Quicken Loans and Ally. For those you prefer to keep all banking in one spot, you can try a bank lender such as Wells Fargo. 

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