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Nationstar (also known as Mr. Cooper) 2018

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by Nina Semczuk Updated
Nationstar
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Our Rating: 3.8/5
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Nationstar Overview

Nationstar (now Mr. Cooper as of August 2017) is one of the largest non-bank servicers in the U.S. The company was founded in 1994 and is headquartered in Dallas, TX. According to Bloomberg, in 2006 the company changed its name from Centex Credit Corporation to Nationstar Mortgage LLC. In late 2017, the company rebranded to Mr. Cooper. For the sake of consistency (and name recognition), we're going to stick with Nationstar for the rest of the review.

The company offers mortgage servicing, loan origination and transaction-based real estate services. Nationstar Mortgage Holdings Inc. has been traded on the New York Stock Exchange since 2012 under the symbol NSM. The company umbrella includes Nationstar, Champion Mortgage, Xome, Title365, and Real Estate Digital (RED). In August 2017, the company changed its name to Mr. Cooper.

Nationstar provides only mortgages and loans — it doesn’t offer any banking, investment or other financial products. It does, however, offer a wide range of mortgage products, including fixed-rate mortgages, adjustable-rate mortgages, FHA streamline and regular loans, home affordable refinance program (HARP) loans, VA home loans and interest rate reduction refinance (IRRRL) loans, and jumbo loans. According to its company website, Nationstar Mortgage serves 2.8 million customers, originated $20.7 billion in loans and carries a loan servicing portfolio of $470 billion.

Today's Rates

National Average Rates

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National Mortgage Rates

Source: Freddie Mac Primary Mortgage Market Survey, SmartAsset Research

Regions Served by Nationstar

Does Nationstar Mortgage Operate in My Area

Nationstar Mortgage is licensed to originate loans in every state except Hawaii. The company services loans in all 50 states.

The company has become sizeable in the years since its founding. According to Bloomberg, the company as 7,720 employees based in various parts of the country. 

What Kind of Mortgage Can I Get With Nationstar Mortgage?

In the words of Nationstar Mortgage, “your loan shouldn’t be one size fits all. It should be the one size that fits you.” True to that statement, the company offers an extensive range of loan options to fit almost every buyer’s needs.

Fixed-rate mortgage: Nationstar offers fixed-rate mortgages in 10, 15, 20, or 30-year loan terms. The interest rate does not change for the duration of the loan — your rate is locked in. The fixed-rate mortgage is a dependable home loan option, as you know exactly what you’re getting. The steady monthly payments with a fixed-rate mortgage can make it easier to budget and is ideal for those planning to stay put for a long time. 

Adjustable-rate mortgage: Also known as an ARM, this mortgage option has an introductory rate period of three, five or 10 years where the interest rate is fixed. After the introductory period expires, the interest rate will change each year depending on national rate indexes. Your loan terms will specify a maximum interest rate that your loan cannot exceed.

Federal Housing Administration (FHA) loan: This government-insured loan may be a good option if you have limited income and funds for a down payment, and/or a lower credit score. SmartAsset put together a comprehensive guide to FHA loan qualifications if you want to take a deeper dive. You can put as little as 3.5% down when you get an FHA loan from Nationstar Mortgage. Mortgage insurance and an escrow account are required for this type of loan.

FHA Streamline loan: If you already have an FHA loan and want to refinance to a lower payment, you have this option at Nationstar. Streamline refinancing is a quicker process with simple document requirements, but does involve fees.

Home Affordable Refinance Program (HARP) loan: This federal program helps those with loans owned by Fannie Mae or Freddie Mac originated before June 1, 2009. It can help lower your monthly payment or shorten your loan term, but this offering does expire in September 2017.

Veterans Affairs (VA) loan: These mortgages are backed by the Department of Veterans Affairs. If you are a current or former member of the U.S. military, you may be eligible for this mortgage. You can find out more about VA loans on the government site. With Nationstar Mortgage you can get a VA loan with a fixed-rate mortgage.

VA Interest Rate Reduction Refinance loan (IRRRL): If you already have a VA loan, the IRRRL is a way to lower your monthly payment. However, it does require a funding fee to execute.

Jumbo loan: If you need to borrow a home loan that exceeds the particular conforming loan limit in the area in which you are buying, you will be in the market for what is known as a jumbo loan. In most of the United States, jumbo loans are ones that are greater than $424,100. However, in some counties with pricey real estate, the conforming loan limit is as high as $636,150, meaning that buyers can take out mortgages up to that amount before their mortgage is a considered a jumbo loan. Jumbo loans are viewed as being risky for the lender because government mortgage finance groups Fannie Mae and Freddie Mac won’t buy jumbo loans. Any jumbo loans that a lender can’t sell stay on the lender’s books. The lender then has the risk that the jumbo loan borrower could default on an expensive home that would be hard to re-sell after foreclosure. To compensate for these risks, lenders may charge higher interest rate for jumbo loans. Still, a jumbo loan may be right for you if you have a lower debt-to-income ratio, a higher credit score and can make a larger down payment. Jumbo loans generally require borrowers to put 20% down. Nationstar jumbo mortgages let you take out a mortgage of up to $2,000,000.

What Can You Do Online With Nationstar Mortgage?

Since Nationstar Mortgage offers no physical locations, the company relies solely on telephone and online support for all its offerings. In December 2016, the company launched a completely retooled online and web app to better support its customers. While the site is easy to navigate and modern-looking, the functionality is lacking in some regards. For one, you can’t prequalify for a mortgage using the online site alone. Each option — from applying for a 30-year fixed rate, to refinancing or just prequalifying — sends you to a contact form with a customer service phone number, or the option to fill in your information for a representative to call you. It’s not the most useful for online-savvy customers trying to get a head start. Another issue is the lack of a search bar. While the navigational sidebar is easy to use, it doesn’t have all your needs captured. The lack of ability to search can be frustrating if you’re trying to find something specific.

That said, Nationstar Mortgage does offer plenty of educational resources on its site. Tools and resources include home buying guides and an extensive explanations of each mortgage term you’re likely to come across.

Once you begin the mortgage process, you’re able to track your progress online with the mobile app and website. Nationstar Mortgage offers Street Smarts™, which delivers custom insights on your loan, home and neighborhood. Examples include calculators for how much equity you have, housing market insights and information about how an increase in your payments would impact the life of the loan. You can make mortgage payments online, or through phone or mail. 

Would You Qualify for a Mortgage From Nationstar Mortgage?

Nationstar’s website doesn’t specify what credit scores are required to qualify you for a loan with the company. In general, a 600 credit score is around the minimum for an FHA loan. A 600 falls in the “fair” category of credit score ranges.

FICO Credit Score Ranges 

Score Range Category
300-579 Very Poor
580-669 Fair
670-739 Good
740-799 Very Good
800-850 Exceptional
Source: Experian

If you want a conventional loan, the higher your credit score the higher your chances of approval. Usually conventional loans are offered to those with good or better credit scores. However, your credit score isn’t the only number that Nationstar Mortgage will consider. Your income, debt levels and down payment savings also affect your ability to qualify for a Nationstar loan.

A normal down payment is generally 20% of the cost of the home. You can put less money down if you’re willing to pay private mortgage insurance, but that will increase your monthly costs. You’ll also have to pay mortgage insurance for FHA loans, as they only require a 3.5% down payment. This is through government premiums called mortgage insurance premiums, or MIPs.

As for your income, your chances for qualifying don’t go up with a higher income. What really matters to lenders is your debt-to-income ratio. Debt-to-income is considered a better indicator of your worthiness as a borrower. Your debt-to-income ratio is calculated by dividing your monthly debt (such as credit cards, student or auto loans) by your monthly gross income. It’s not set in stone, but many lenders prefer DTI at 30% or below for a conventional loan, and no more than 43% for other loan offerings.

What’s the Process for Getting a Mortgage With Nationstar Mortgage?

You can apply for a mortgage with Nationstar Mortgage over the phone. While there is a website where you can learn what your options are, you can’t apply solely through the site. You’ll have to call the company or request through a contact form that someone calls you. Once you begin, you’ll be walked through the necessary steps and required paperwork (such as pay stubs, bank statements and W2s) to verify you as a borrower. Nationstar will look at your credit score, debt-to-income ratio, overall income, savings and a number of other factors. The company does offer refinancing as part one of its services, which is something to keep in mind as well.

Depending on your specific situation, a customer service representative will discuss your loan options and possibly pre-approve you for a loan. If you’re pre-approved, you can put an offer on a home. If an offer is accepted, you’ll contact Nationstar and continue the paperwork process to loan approval. If you meet the requirements and the loan goes through correctly, you’re ready to set a closing day. Nationstar claims, “we don’t do nasty surprises,” so you’ll always know how much money is required on closing day.

At any time between applying for a loan and closing on your home you can get in touch with a Nationstar Mortgage representative by email, fax or phone. 

How Nationstar Mortgage Stacks Up

As one of the largest non-bank servicers, Nationstar Mortgage has plenty of experience in the mortgage space. In recent years, the company has undergone effort to adjust the customer experience. Some of these efforts include a new website and app, educational materials and a new rebrand launching August 2017.

While Nationstar has years of experience as a telephone-based company, you may prefer an in-person experience if you need that personal touch.

As with any financial institution, there are pros and cons and numerous complaints. As always, you’ll need to do your own research to find what best fits your needs as a borrower.

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