Headquartered in Delray Beach, Florida, ConsumerDirect Mortgage opened in 2012 as a division of FirstBank. ConsumerDirect offers a basic menu of loan options, including conventional and a few government loans in nearly every state. But it doesn’t offer niche products, such as home equity loans, reverse mortgages, renovation loans, and construction loans.
ConsumerDirect could be a good option if you qualify for the lender’s competitive rates and closing cost credits. The company claims 99% of its loans receive a lender credit that goes toward closing costs. The “Get Rates” tool is easy-to-use and customizable to your specific situation. You can also easily apply online, get preapproved online, upload documents, or request your quote by email. You also have the option to call a customer care agent.
The lender also has a nifty mortgage calculator to help you understand your upfront and monthly borrowing costs. Borrowers need to watch out for the fine print, though. Some of the lower advertised rates have discount points. Discount points lower the rate — making the rate quote look good at first glance, but they come at an extra cost to the borrower.
Here’s what to know about this lender before applying for a mortgage.
Pros and Cons of ConsumerDirect Mortgage
Available in 49 states and Washington, D.C.
Offers a lender credit on most of its loans
Easy to use, customizable online tool to view rate and products
Easy application and preapproval process online
Not available in Maryland
Only has three in-person branches
Doesn’t offer specialty products, such as home equity loans, reverse mortgages, renovation loans, and construction loans
Watch out for discount points in low, advertised rates
ConsumerDirect Mortgage: Loan Types and Products
ConsumerDirect doesn’t offer specialty loan products — instead, it focuses on providing a basic mortgage lineup. Here’s what the lender offers right now:
- Conventional loans
- Federal Housing Administration (FHA) loans
- Department of Veterans Affairs (VA) loans
- Jumbo loans
- Refinance loans
- Fixed-rate loans
- Adjustable-rate loans
With a fixed-rate loan, the rate never changes and you’ll have predictable principal-and-interest payments throughout the mortgage term. On the other hand, an adjustable-rate mortgage (ARM) comes with a fixed rate only for a certain amount of time. Once the fixed period is over, the ARM rate may rise or fall based on market conditions. ConsumerDirect funds ARMs with terms of 5/1, 7/1, or 10/1. On a 5/1 ARM, for example, the rate is fixed for the first five years, then adjusts once a year for the rest of the loan term.
ConsumerDirect also offers jumbo mortgages, which are home loans that exceed a certain dollar amount called the conforming loan limit. That limit is $548,250 in most parts of the country, though it’s higher in some high-cost counties. ConsumerDirect funds jumbo loans up to $2 million.
ConsumerDirect doesn’t offer specialty products such as mortgages backed by the U.S. Department of Agriculture (USDA loans), home equity lines of credit (HELOCs), home equity loans, renovation loans, reverse mortgages, or construction loans.
ConsumerDirect Mortgage Transparency
ConsumerDirect’s website includes an in-depth mortgage calculator that estimates your borrowing costs based on information you plug in. Once you enter your estimated loan amount, down payment, loan term, credit profile, and ZIP code, the calculator provides a customized rate quote, monthly payment, and a list of closing costs you may pay. You can also add your homeowners insurance and property tax costs to get a better idea of what you’ll pay every month.
Aside from this calculator, ConsumerDirect offers fewer education materials compared to some other mortgage lender websites. Customers will find a short FAQs page, a few blog posts, a mortgage glossary, and limited information on its loan programs. But the application process is straightforward, and you can connect with a loan officer quickly if you need help understanding your options or get stuck along the way.
ConsumerDirect Mortgage: Rates and Fees
ConsumerDirect advertises daily refinance and purchase rates for 15-year fixed loans, 30-year fixed loans, and 5-year adjustable-rate mortgages. These rates can change every day and may include discount points, which is an optional upfront fee you pay in exchange for a lower interest rate.
You can adjust the rate quote based on factors like your down payment, credit profile, and loan amount. But you’ll need to get preapproved or submit an official mortgage application to see if you qualify for the loan terms.
According to its website, ConsumerDirect provides some sort of lender credit to help cover the closing costs on 99% of the loans it funds. When you get an online interest rate quote, ConsumerDirect will estimate your lender fee credit. You’ll also receive a list of some of the closing costs borrowers pay, which may include:
- Origination fee
- Appraisal fee
- Credit report fee
- Flood certification fee
- Tax service fee
- Survey fee
- Title search and title insurance
- Discount points, if you choose to buy them
- Prepaid costs for escrow
With ConsumerDirect loans, borrowers won’t pay prepayment penalties and can lock in a rate for up to 90 days.
The lender doesn’t advertise minimum credit score directly, but when using its “Get Rates” tool, you need to enter your credit score to see rates. If you input anything less than 620 or less than 5% down payment, it says: “We are unable to find any rates for this loan scenario.”
In general, the minimum credit score requirements by loan type are.
- Conventional loans typically require a score of at least 620 and a minimum down payment of 3%, depending on the mortgage program you use.
- FHA loans have more flexible requirements. Your credit score can be as low as 500 if you put down at least 10% of the home’s purchase price, or 580 with a minimum down payment of 3.5%.
- The Department of Veterans Affairs doesn’t set credit requirements for VA loans, though the lender might set its own minimum.
Of course, with any loan program, having a higher credit score can help you qualify for the best mortgage rates.
Refinancing With ConsumerDirect Mortgage
Homeowners with an existing mortgage can refinance with ConsumerDirect using these options:
- Cash-out refinance allows you to pay off your existing home loan by getting a new one that’s larger than what you currently owe. You’ll get a check for the difference, which you can use for things like home improvement, debt consolidation, or even a child’s college tuition.
- Rate-and-term refinance can help you save money on your monthly payment if you qualify for a lower interest rate. Or, you can change the loan term or rate type if the resulting payment better fits your budget.
ConsumerDirect Mortgage Compared to Other Mortgage Lenders
|ConsumerDirect Mortgage||Fairway Independent Mortgage Corp.||New American Funding|
|Minimum credit score||Not advertised||620 for conventional loans; 660 for jumbo loans; 600 for FHA loans; 600 for VA loans||580|
|Minimum down payment||Not advertised||0% to 5%||0% to 5%|
|Where does the lender operate?||49 states and Washington, D.C.||All 50 states and Washington, D.C.||Washington, D.C., and all states except New York and Hawaii|
|Major loan types||Conventional, jumbo, VA, FHA, adjustable-rate, fixed-rate, refinance, cash-out refinance||Conventional, jumbo, VA, FHA, USDA, various renovation loans, adjustable-rate, fixed-rate, refinance, cash-out refinance, reverse mortgages, home equity loans, home equity lines of credit||Conventional, jumbo, VA, FHA, USDA, renovation loans, adjustable-rate, fixed-rate, refinance, cash-out refinance, reverse mortgages, home equity lines of credit|
How to Shop Around to Get the Best Mortgage Rate
If you’re looking to save money on your home loan, set aside time to shop around. Mortgage rates are always in flux, and every lender has a different way of setting rates for customers. So getting mortgage quotes from multiple lenders can help you compare offers and find savings either on closing costs or the interest rate.
According to a 2018 Freddie Mac survey, borrowers saved an average of $3,000 when they got at least five rate quotes. You might be able to save even more if you negotiate. After comparing offers, send the best deal to another lender. If you have a high credit score or substantial down payment, lenders may be willing to compete with others by working with you on the interest rate or closing costs.
To see how small differences in rate quotes matter, take a look at one example. Say you want to buy a home worth $250,000 with a 20% down payment and 30-year mortgage term. You receive quotes from two different lenders and use an online mortgage calculator to figure out your potential savings:
|Interest rate||Monthly interest and principal payment||Interest saved|
|2.75%||$816||$27 per month or $9,720 over the loan term|
With a 3% interest rate, the monthly principal and interest payment comes out to $843. But with a 2.75% interest rate, you save $27 a month on interest costs. That might not sound like much, but it adds up to $9,720 in savings over 30 years.
ConsumerDirect offers several basic home loan options, including fixed- and adjustable-rate mortgages, conventional loans, FHA mortgages, and VA loans. You can also do a cash-out or rate-and-term refinance if you have an existing loan term. The lender also has a mortgage calculator that can help you understand your upfront and monthly borrowing costs.
ConsumerDirect could be a good option if you qualify for the lender’s competitive rates and closing cost credits, and you don’t mind going through the application process online or over the phone.
But if you’re looking for in-person help at a local branch, you need a specialty loan product, or you’re buying a home in Maryland, you’ll have to look elsewhere for a home loan.