Catering to first-time homebuyers and borrowers with less-than-stellar credit, Carrington Mortgage Services specializes in government-backed loans and working with “riskier” borrowers. The direct mortgage lender operates in almost every state and accepts low down payments.
Sounds like the lender for you? Keep reading for everything you need to know about Carrington.
Carrington Mortgage Services offers conventional loans, three major government-backed home loan options, two low down payment products unique to the lender, adjustable-rate mortgages and jumbo loans.
Conventional loan. A fixed-rate loan that has the same interest rate over the life of the loan, which means your monthly principal and interest payments will stay the same throughout the course of your mortgage. You’ll need a good credit score and a low DTI ratio to qualify for the best terms and lowest rates. Carrington offers conventional loans in 30-year or 15-year terms.
Federal Housing Administration (FHA) loan. A government-backed loan to help those with poor credit purchase a home. Carrington qualifies borrowers with credit scores as low as 500 and down payments as little as 3.5%.
Department of Veterans Affairs (VA) loan. A government-backed loan to help qualified veterans, service members and select spouses purchase a home. It features no down payment, no private mortgage insurance required, and good terms. Carrington qualifies borrowers with credit scores as low as 500.
Department of Agriculture (USDA) loan. A government-backed loan to help those living in rural areas purchase a home. It’s designed for low-income households and does not have a down payment requirement. Carrington qualifies borrowers with credit scores as low as 500 for this type of loan.
Home Possible. In order to apply for this loan, the home must be your primary residence. You’ll need a minimum credit score of 620 and a down payment as low as 5% in order to qualify.
Home Possible Advantage. This loan comes with the same requirements and loan terms as Home Possible loans but allows for a minimum down payment of 3%.
Jumbo loan. A conventional loan that is above the limit set by Fannie Mac and Freddie Mac. Currently, the minimum loan limits are $453,100 to $679,650, depending on where the property is located.
Refinance loans. You might be able to lower your current mortgage payment, have the funds to remodel or cash out on your mortgage by refinancing your loan. Carrington offers an option for each of these goals.
Carrington Mortgage Services partners with 53 down payment assistance programs in 13 states to help eligible borrowers fund their down payments and closing costs. Eligibility varies by city, county, and state, but generally includes first-time or low-income homebuyers.
The “Underserved” Borrower
Coined the “underserved” borrower, people that make up this special homebuying population have credit scores of less than 650 and are typically viewed by lenders as risky. These underserved borrowers make up the majority of Carrington’s clients. They often provide low down payments for 30-year FHA loans and have a minimum credit score of 500.
Carrington manually underwrites loans in-house, so the company can offer more lenient borrowing requirements with experience in managing credit issues that often come up with these kinds of loans. If your credit score is far from perfect, Carrington will also consider other factors like mortgage payment history, job history, job stability and gross income.
My Loan Detail
Carrington requires all its borrowers to take an online financial education course called “My Loan Detail” before closing the loan. The program ensures their borrowers understand the terms and conditions of their loans. It covers loan fees, what happens if you miss payments, the definition of a loan officer, processor and broker, and more. Completion of the course gives Carrington more confidence that you’ll be able to repay your loan.
Carrington’s mortgage rates are not published on its website. Nor is there an online rate estimate tool, so there’s no way of getting a ballpark number unless you contact a Mortgage Professional and go through prequalification.
Alternatively, you can enter some information online at Carrington Connects and explore loan options and rates there (more on prequalification and applying later).
Carrington Mortgage Services both originates and services its loans in-house. Although this usually means greater customer satisfaction, such is not the case with Carrington. Numbers show that the direct lender experiences a high number of official complaints to origination volume, compared to its peers.
In the J.D. Power 2018 U.S. Primary Mortgage Servicer Satisfaction Study, Carrington Mortgage Services came in at #30, out of 31 lenders, with a score of 673 points (out of a possible 1,000 points). This study measured customer experience in six factors:
- New customer orientation
- Billing and payment process
- Escrow account administration
- Mortgage fees
Carrington’s extremely low survey score indicates that it performs quite poorly compared to its mortgage lending peers at managing its relationship with customers.
Carrington Mortgage Services is licensed to originate and service loans in every state except Massachusetts and North Dakota. Based out of Anaheim, California, the company has physical branches in twenty states.
If a brick-and-mortar location is not within easy reach, borrowers can access loan servicing and management through Carrington’s website.
By using Carrington Connects, the company takes you through every step of the homeownership journey – finding your dream home, getting a loan that’s right for you, and closing and owning – all on one site.
You’ll also get the help of a dedicated home specialist if you need it. If you’d rather, you can start the mortgage process by visiting or calling one of Carrington’s physical branches.
No matter which method you decide to take, you can always submit and receive documents online and check your application status by creating an online account with Carrington.
When you apply for a loan with Carrington, the company takes you through the following steps:
Prequalification. This happens before the actual loan process begins. Carrington will gather your financial information and makes a conditional determination about your qualifications for a loan.
Application. You will complete a mortgage application with a Mortgage Professional and supply all of the required information and documents for processing. At this time, down payments and closing costs are discussed. You will receive a Good Faith Estimate (GFE) and a Truth-in-Lending (TIL) statement that puts the rates, loan fees, and associated costs, down on paper.
Processing. Carrington will review all your submitted information and documents and will provide a loan package for the underwriter.
Underwriting. An underwriter will determine whether the information and documents are acceptable in order to offer you a loan. If more information is needed, you will be notified to supply it.
Pre-closing. At this step, title insurance is ordered and a closing date is scheduled for the loan.
Closing. In the final step in the mortgage process, Carrington will fund the loan with a cashier’s check, draft or wire to the selling party in exchange for the title of the property.
Carrington Mortgage Services offers a plethora of mortgage options with low down payment requirements, but the company does not fare too well in the customer service department.
The direct lender accepts very low credit scores, which is in line with its mission to work with underserved home buyers who won’t normally qualify for a loan with the average lender.
However, I’m not enthralled with Carrington’s lack of transparency. The company does not publish mortgage rates, nor does it have something as basic as a search bar.
Overall, its website is not as functional, thereby more frustrating, when compared to its peers in the industry. If you prefer an online-based, transparent lender, you should check out Quicken Loans.
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