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U.S. Bank Mortgage Review 2021

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Editor’s note: The overall conclusions, recommendations and opinions are the author’s alone. The information in this article is accurate as of the date of publishing.

U.S. Bank is a retail bank that first opened its doors in 1863 as First National Bank of Cincinnati. After several mergers about 20 years ago, it formally changed its name and relocated its headquarters to Minneapolis.

The bank is the fifth-largest commercial bank in the U.S. based on consolidated assets, according to Federal Reserve rankings. Its parent company is U.S. Bancorp, which had $547 billion in assets as of June 30, according to the company’s most recent earnings report. U.S. Bank offers home loans and other mortgage products both in-house and through a network of correspondent lenders. Those lenders are allowed to underwrite, fund and close loans in U.S. Bank’s name, which gives correspondent partners more control over the loan process than a mortgage broker.

Pros and cons of a U.S. Bank mortgage

Pros

  • Offers a wide variety of different loan programs
  • Offers a special refinancing discount and a closing cost credit for current customers
  • Offers a fully digital mortgage application process

Cons

  • Doesn’t have branches with loan officers available in all states
  • Doesn’t provide information online about minimum qualifying requirements for its loans
  • Doesn’t provide online information about the low-down-payment conventional loans it offers

Working with U.S. Bank

U.S. Bank offers mortgages in all 50 states. You can search for a U.S. Bank mortgage loan officer at branches in 40 states:

  • Arkansas
  • Arizona
  • California
  • Colorado
  • Connecticut
  • Florida
  • Georgia
  • Iowa
  • Idaho
  • Illinois
  • Indiana
  • Kansas
  • Kentucky
  • Massachusetts
  • Maryland
  • Michigan
  • Minnesota
  • Missouri
  • Montana
  • North Carolina
  • North Dakota
  • Nebraska
  • New Jersey
  • New Mexico
  • Nevada
  • New York
  • Ohio
  • Oklahoma
  • Oregon
  • Pennsylvania
  • Rhode Island
  • South Dakota
  • Tennessee
  • Texas
  • Utah
  • Virginia
  • Washington
  • Wisconsin
  • West Virginia
  • Wyoming

In 2019, U.S. Bank announced a streamlined online mortgage application for new and existing customers. At the same time, it simplified the online process for applying for a home equity loan or a home equity line of credit (HELOC). Customers can apply online for a home equity loan in any region that’s served by a U.S. bank branch, while digital applications for home equity lines of credit (HELOC) are available in 47 states and the District of Columbia.

In 2019, U.S. Bank’s average residential mortgage volume rose by $5.4 billion from the previous year.

U.S. Bank borrowing requirements

On its website, U.S. Bank doesn’t provide information about minimum credit score requirements or acceptable property types for mortgage financing. Manual underwriting may be available on a case-by-case basis for down payment assistance loans.

U.S. Bank mortgage products

Purchase

Conventional fixed-rate loans. Borrowers who have a good credit history can receive a fixed-rate conventional mortgage with as little as a 5% down payment.

Adjustable-rate mortgages (ARMs). U.S. Bank offers ARMs with initial rate periods from three to 10 years. Rates can adjust either up or down after the initial rate period expires. ARM loans require at least a 5% down payment.

FHA loans. Credit-challenged home buyers may be eligible for a loan backed by the Federal Housing Administration (FHA) that requires only a 3.5% down payment.

VA loans. Active duty and retired military homebuyers (as well as eligible surviving spouses) may qualify for either a low- or no-down-payment loan backed by the U.S. Department of Veterans Affairs (VA) — plus, the loans don’t require private mortgage insurance. Both fixed-rate and ARM options are available.

Down payment assistance loans. U.S. Bank works with state and local housing finance agencies to offer down payment assistance loans in select areas to promote homeownership in low- and moderate-income neighborhoods.

Jumbo loans. Luxury homebuyers looking for a loan amount above the $510,400 limit for conforming loans in most areas can choose either a fixed-rate or ARM jumbo loan.

Investment property loans. Financing is available for one- to four-unit residential rental properties if you’re ready to start building a portfolio of investment properties.

New construction loans. U.S. Bank offers both construction and construction-to-permanent loans to finance the cost of building your own home. A construction loan is a short-term mortgage that pays builders as your home is completed; once it’s built, you pay the balance off with a new and permanent loan. Construction-to-permanent loans allow you to build a home and automatically convert the loan to a permanent mortgage once the home is finished.

Lot loans. U.S. Bank offers loans to help you buy land as the site for a future home.

Refinance

Conventional loans. Customers may be able to refinance to a lower fixed-rate loan or an ARM loan. If you want to pay your 30-year loan off faster, 10-, 15- or 20-year terms are available.

Cash-out refinance loans. U.S. Bank offers cash-out refinancing on conventional, FHA and VA loans. Refinancing guidelines typically let you borrow up to 80% of your home’s value for both conventional and FHA loans, and up to 90% for VA loans.

FHA and VA streamline loans. Designed specifically for homeowners with current FHA or VA loans, these loans let eligible borrowers receive better rate terms — like a lower interest rate — with less hassle and paperwork. For example, you may be able to bypass having your income verified or getting a home appraisal.

Home equity products

Home equity loans. U.S Bank offers fixed-rate home equity loans with terms up to 30 years. It also offers a fully digital application process.

Home equity lines of credit (HELOCs). A HELOC lets you use the equity in our home to receive a flexible, revolving line of credit at an interest rate lower than for most credit cards. You typically access funds as needed during a set draw period, paying only interest, and then start repaying the balance once the draw period ends. Borrowers can apply for a HELOC online, by phone or at a U.S. Bank branch.

U.S. Bank special mortgage programs

Smart Refinance. This no-closing-cost refinance option comes with a fixed rate and flexible terms, for a maximum 20 years. Qualified borrowers can choose a lower interest rate, change loan terms or tap equity.

To get the lowest rates, applicants will need to set up automatic payments from a U.S. Bank checking or savings account. One catch: The program comes with a prepayment penalty that’s equal to 1% of the loan amount if the loan is paid off within the first 36 months after it’s taken out (30 months for customers in North Carolina).

Mortgage Customer Credit. Current U.S. Bank customers looking to buy a new home may be able to qualify for a closing cost credit that’s equal to 0.25% of their loan amount, up to $1,000. Homeowners refinancing an existing U.S. Bank mortgage may also be eligible for the credit.

The mortgage application process

  • How to apply. Borrowers can apply entirely online or with the help of a mortgage professional.
  • Disclosure process. All necessary loan disclosures can be electronically signed after filling out an application. Customers may choose digital verification of their income, assets and creditworthiness.
  • Submitting loan for approval. According to the bank, borrowers can apply online in as little as 30 minutes, or 15 minutes for a home equity loan or HELOC. Additionally, borrowers can upload documents to the U.S. Bank loan portal.
  • Final approval. Once an application is received, a U.S. Bank underwriter reviews it and requests additional documents as needed. Customers who choose electronic verification of their income and assets may receive a preapproval within minutes of applying.
  • Closing. Federal law requires lenders to issue a closing disclosure with all final mortgage terms and costs three business days before a loan closes. Your closing agent will help prepare and oversee the final paperwork.
  • Servicing. U.S. Bank services many of the loans it closes, but it may also transfer closed loans to a new mortgage servicer.

Communication during the process

Mortgage loan officers are available to answer questions by email or phone throughout the process. Borrowers can also track their loan status or communicate with their loan team through the U.S. Bank loan portal. Here’s a list of numbers for additional help:

  • For a new mortgage, call 877-303-1637
  • For refinance loans, call 877-303-1640
  • For customer service for existing customers, call 800-365-7772
 

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