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Santander Mortgage Review 2018

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by Nina Semczuk Updated
Santander
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Our Rating: 2.9/5
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Santander Mortgage Overview

Santander Bank offers a wide variety of mortgage options, as well as a full suite of retail banking services, such as checking and savings accounts, credit cards and investment services. You can find conventional and government-backed loans, as well as special programs for first-time homebuyers and flexible down payment options with this lender. 

Santander Bank debuted in the Northeastern states of the U.S in 2013. Headquartered in Boston, the bank has already grown to 17,500 U.S. employees. It is part of Santander Holdings, a global company founded and headquartered in Spain. The global firm serves over 100 million customers worldwide.  

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 Santander

 

Does Santander Mortgage Operate in My Area?

Santander originates mortgage loans in Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont.

Retail banking locations are found in Connecticut, Delaware, Florida, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania and Rhode Island.

What Kind of Mortgage Can I Get With Santander?  

Conventional: Conventional loans can be fixed-rate loans or adjustable-rate mortgages (ARM). Fixed-rate loan terms are generally in 15-year or 30-year terms. Most homebuyers choose fixed-rate loans because your interest rate, and therefore your principal and interest payment, stays the same for the life of the loan. ARMs are generally found as “hybrids” in 5/1, 3/1, 7/1 or 10/1 terms. The first number indicates the number of fixed-rate years, and the second number indicates how often your interest rate will adjust after the fixed-rate period finishes. Conventional loans generally require a 20% down payment. If you have less than 20%, you’ll pay private mortgage insurance until you reach about 20% home equity.   

VA loan: This government-backed loan is for veterans, active service members and eligible National Guard and Reserve personnel. Highlights of VA loans include no down payment, no private mortgage insurance and favorable lending terms.  

Federal Housing Administration (FHA) loan: If you don’t have down payment savings and you’re not a veteran, an FHA loan may be a good option for you. Finance up to 96.5% of the home value with this flexible option available for purchases and refinances. FHA loans are also generally available to those with less than perfect credit scores.  

H.O.M.E Program: The Home Ownership Made Easy Program requires homebuyer education for borrowers in exchange for no down payments on single-unit residences. If you want to buy a two- to four-unit residence, your down payment can be as low as 3% through this program. There are no income limits for borrowers living in low-income census locations. 

80-10-10 Combination loan aka “Piggyback Loan”: Santander is one of the few banks SmartAsset’s reviewed that lists piggyback loans as a mortgage option. This type of mortgage allows you to get a home without 20% down by adding a variable rate home equity line of credit (HELOC) on top of your mortgage. It’s known as a 80-10-10 because the mortgage is for 80% of the home value, the HELOC is for 9.99% and your down payment is 10.01%. This can help you avoid private mortgage insurance, but it’s a tactic that mostly went out of favor after the financial crisis.  

Home Construction loan: Santander offers home construction loans that combine your construction costs as well as your permanent mortgage. There are several terms and rates options. Your loan officer will work with you and your builder for the entire building process. 

Refinance:  You can refinance an existing mortgage with Santander. The bank offers VA, FHA and conventional refinancing options with fixed-rate or ARM terms. You can also refinance with a HARP loan if your mortgage was from 2009 or earlier. This government option expires at the end of 2018.  

What Can You Do Online With Santander?

On the spectrum of tech-savvy to basic analog, Santander definitely leans more toward the latter. While you can click on the prequalify button prominently displayed on Santander’s mortgage pages, it leads you to a form that culminates in the promise of a phone call or other contact from a Santander rep. You won’t find out if you prequalify online.

You also won’t find rates or rate quotes offered here. The most you can do on the company’s website is learn about the basics of mortgages. There’s a PDF glossary of common mortgage terms and there are home-buying tools, such as calculators. However, there aren’t any videos, comprehensive first-time homebuyer guides or informative blog posts - all features found on other lender websites.  

You also can’t find much information about the specific loan types offered by Santander. There are a few words after each, such as “FHA Loan Features: affordable, attainable and flexible.” But you won’t find minimum credit scores required by Santander or any other specific details. The site as a whole is very broad stroke, rather than detailed, informative and ultimately useful.

Would You Qualify for a Mortgage From Santander? 

Santander isn’t the most transparent bank. You won’t find minimum FICO credit scores listed next to mortgage loan options, like you’ll find on other lenders’ websites. That means you have to speak with a loan officer to find out what types of loans you might qualify for. 

In general, the first concern is your credit score. Most lenders require at least a 580 to 620 for an FHA or VA loan. Some lenders accept as low as 500 or 550, but again, it’s on a case by case basis. Conventional loans require better credit. Favorable loan terms come with credit scores 740 and above in most situations. 

In addition to your credit score, your lender will consider your debt-to-income ratio (DTI). This percentage helps your lender understand how much money you have each month available to pay your debts. Many lenders have a maximum of 36% to 41% DTI for borrowers. You can calculate your DTI by adding up all your monthly debt payments, including your car loan, student loans, alimony, child support and credit card debt. Next, add your projected monthly mortgage payment to that number. Then, divide by your pre-tax monthly income. Multiply by 100 and that’s your DTI.

After credit score and DTI is your down payment savings. For some borrowers, such as those applying for a VA loan or FHA loan, it’s not as important. But, you still will need to prove you have some sort of savings, as the closing costs on most loans total in the thousands. If you’re applying for a conventional loan, you need a 20% down payment to avoid private mortgage insurance and to qualify for the best terms.  

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

Santander’s mortgage process is mostly analog. You can fill out a form online to “prequalify.” Required information includes name, contact details, salary, current insurance and taxes and property location. After you fill out the form, Santander states to expect a phone call in two business days. Once you speak with a loan officer, you’ll get more details on what to do next.  

The bank also has a PDF copy of the mortgage application on its website. According to what’s on the form, you can fill out the application and fax or mail it. There is no online option. 

In general, when you apply for a loan, you’re required to provide your Social Security number, loan amount, down payment amount, work and income information, veteran status and assets. You have to provide documents such as tax returns, pay stubs, W-2s, bank statements, asset statements, the purchase agreement and identification. The required documents help provide proof that you can afford the mortgage and are a trustworthy borrower. If you’re a freelancer or otherwise self-employed, you’ll need to provide a profit and loss statement or other proof of income. 

When your lender receives all necessary documentation they’ll review your application to determine whether you qualify for a loan or not. If you’re approved, you can move forward with the rest of the steps, such as setting a closing date and arranging for homeowners insurance. The last step is closing. This is when you sign all the final paperwork, pay closing costs and get the keys to your new home. 

How Santander Stacks Up

When you compare Santander mortgages to national banks, such as Wells Fargo and Chase, it comes up short. While Santander may be an international bank with all the retail banking options found at comparable U.S. giants, it hasn’t moved beyond the handful of East Coast states yet. You won’t find banking locations and and loan officers in almost every state like you will with Chase or Bank of America. With Santander, you can only apply for a mortgage if you’re buying in one of the 11 states it operates in. 

That puts it comparable to some non-bank startup lenders, such as Better Mortgage or Lenda which offer mortgages in limited numbers of states too. However, startup lenders offset the lack of availability and retail locations with optimized user experience on the web and with customer service. You can apply for a prequalification or preapproval with a transparent seamless web-based platform. While Santander does offer online prequalification, it’s an older and clunkier experience and doesn’t give you a result after you fill out the form; you have to wait a few days to hear from a Santander representative. 

Another ding on the company’s transparency is a lack of mortgage rates. You can’t find current or even sample mortgage rates on Santander’s website. There are a few tools and resources, such as a glossary and a mortgage calculator, but nothing tied to terms and rates. 

On the plus side, Santander does offer a large variety of mortgages. There are FHA, VA, HARP, and down payment assistance programs. That’s more than what many smaller lenders, such as Better Mortgage and Lenda, mentioned above can offer. However, it’s on par with other bank lenders, like any of the big four mentioned previously.  

If you happen to live in one of the areas Santander services, it may be worth checking out to compare with a larger U.S. based bank. You’ll have to call or visit a branch in person, as you can’t get a rate quote online, but if you’re interested in one of the specialized loan programs, or just want to see if the terms are more favorable here, it may be worth your time. However, those wanting a seamless, quick, online experience may be better off trying a lender such as Movement Mortgage or Quicken Loans - two options that pride themselves on speed and online user experience. 

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