Lower.com Mortgage Review 2020
Editor’s note: Parts of this article were reviewed by a lender to ensure accuracy prior to publication. The overall conclusions, recommendations and opinions are the author’s alone. The information in this article is accurate as of the date of publishing.
Lower.com is an online direct mortgage lender founded in 2018. The company does business as part of Homeside Financial and is headquartered in Columbus, Ohio. According to Lower.com’s website, all 260 employees work out of the headquarters location.
As of July 2020, the company had originated $621.1 million in mortgage loans, according to email responses provided to LendingTree.
Working with Lower.com
Lower.com is currently licensed in more than 30 states and the District of Columbia, including:
Lower.com mortgage borrowing requirements
Lower.com follows Fannie Mae and Freddie Mac guidelines for conventional loans. However, the company also offers government-backed loans, too. The minimum acceptable credit score is 620.
Lower.com loans are offered for:
- Single-family homes
- Multifamily homes
- Manufactured homes (with limitations)
Lower.com does not offer loans for:
- Mobile homes
Lower.com mortgage products
Lower.com offers a variety of products for purchase, refinance or home equity loans on primary residences, second homes and investment properties.
- Conventional mortgages. Fannie Mae and Freddie Mac set guidelines for conventional loans, which are not backed by any government agency and tend to be more strict than government-backed mortgages.
VA loans. Eligible military borrowers may qualify for a no-down-payment loan guaranteed by the U.S. Department of Veterans Affairs (VA).
- FHA loans. Loans insured by the Federal Housing Administration (FHA) typically allow borrowers to purchase a home with a minimum of 3.5% down and more flexible qualifying requirements than conventional loans.
- USDA loans. The U.S. Department of Agriculture (USDA) guarantees loans with no down payment for low- to moderate-income borrowers to finance homes in designated rural areas.
- Jumbo loans. Homebuyers in high-cost areas or those looking to purchase a luxury home may need a jumbo mortgage if the loan amount exceeds the conforming loan limit of $510,400 for most parts of the country.
- Conventional loans. Homeowners can replace their current loan to get a lower rate or shorter term with a conventional refinance and receive an added bonus: No mortgage insurance is required with 20% equity.
- VA refinance. Eligible military borrowers can take advantage of more lenient refinancing guidelines to pay off a non-VA loan.
- FHA refinance. Lower-credit-score borrowers may find that an FHA refinance is easier to get approved for than a conventional refinance.
- Cash-out refinance. A cash-out refinance allows homeowners to borrow more than they currently owe and use the extra cash to meet other needs, such as improving their home or consolidating debt.
- USDA Streamlined Assist. Borrowers with a current USDA loan won’t need an appraisal, credit report or income verification to refinance under this program.
- Fixed-rate mortgages. Borrowers who prefer the stability of a fixed rate can choose a 15-, 20- or 30-year term.
- Adjustable-rate mortgages (ARMs). Lower.com offers 5/1, 7/1 and 10/1 ARM options. Once the initial fixed-rate period ends, the rate will adjust every year.
- Rate-and-term refinance. The purpose of this type of refinance is to get a lower rate, shorten the loan term or switch from an ARM to a fixed-rate mortgage.
- VA interest rate reduction refinance loan (IRRRL). Borrowers with a current VA loan may be able to refinance with no appraisal or income verification.
- FHA streamline refinance. FHA offers a streamline refinance for homeowners with a current FHA loan to lower their rate without an appraisal or income verification.
- Renovation loans. Consumers can buy or refinance a home and roll in the costs of repairs with a renovation or home improvement loan.
Lower.com special mortgage programs
- Refinance fee-free for life. Lower.com will waive origination, underwriting, processing or administrative fees for existing Lower.com customers who return to refinance again. Customers must still pay for discount points and third-party fees, such as title search, settlement, appraisal and credit report fees.
- Home equity lines of credit (HELOCs). Qualified applicants can tap $15,000 to $350,000 of equity up to 95% of their home’s value with a Lower.com HELOC. An interest-only payment option is available with terms up to 10 years. Most HELOC lenders allow borrowers to access only 85% of their home’s value, according to the Federal Trade Commission.
- 5/5 adjustable-rate mortgage (ARM). Qualified customers can borrow up to $1 million with a down payment as low as 5%. The rate is fixed for the first five years and then converts to an adjustable rate that can fluctuate every five years.
- Application powered by AI. Lower.com uses an artificial intelligence (AI) search engine to suggest loan options by matching an applicant’s financial information to thousands of other closed loans.
The mortgage application process
- How to apply. Lower.com’s website provides several options for applying for a mortgage, including an online link, a quick application that doesn’t require a hard credit check and the option to text information. Once the process begins, borrowers can consent to have their bank accounts and payroll accessed electronically.
- Disclosure process. After receiving the information, a loan adviser contacts the applicant and provides a loan estimate within three business days. Documents can be signed from a computer or smartphone. Customers who aren’t comfortable with digital signings can meet with a notary to sign the initial disclosure paperwork in person.
- Submitting loan for approval. Lower’s loan recommendation engine uses artificial intelligence as part of the approval process to ensure applicants get the right loan for their needs. Financial papers can be uploaded with a document upload tool.
- Final approval. Final approval and closing disclosures are provided to the customer before the closing.
- Closing. Borrowers can choose a completely digital closing with very little in-person contact. Documents that need signatures can be signed in your home. Lower.com schedules the notary or attorney appointment at a location that’s convenient for you.
- Servicing. Lower.com services some of its loans, but sells other loans to other servicers.
Communication during the process
Lower.com loan advisers communicate with customers by phone, text or email, and are available throughout the process. Its website states you can get help “at any time, day or night,” and doesn’t list business hours.
Pros and cons of a Lower.com mortgage
- Digital application. You can apply for, process and close your loan entirely online.
- HELOCs that allow you to tap more equity. Consumers can access up to 95% of their home’s equity compared with 85% with most other HELOC lenders.
- Special refinance program for repeat customers. Lower.com customers can refinance a current Lower.com mortgage with no lender fees.
- Website lacks detailed product information. Loan product information and qualifying guidelines are not online.
- Limits on types of properties that can be financed. You can’t finance co-ops and mobile homes through Lower.com.
- No fixed-rate home equity loan options. Lower.com doesn’t offer fixed home equity loans.