Mr. Cooper Mortgage Review 2024: Online Mortgage Options With Opportunities To Save (2024)

Mr. Cooper Mortgage Review 2024: Online Mortgage Options With Opportunities To Save (1)

Zillow Home Loans

See Offers

Vault Verified

Expert Take

Zillow Home Loans could be worth considering if you have at least a fair credit score and you prefer a convenient, online mortgage experience. The online lender requires a minimum FICO Score of 620 or higher from its borrowers—criteria that’s slightly stricter compared to some competitors. But you can receive a pre-qualification and rate estimate with just a soft credit inquiry. Nonetheless, it remains important to compare any offer you receive with mortgage offers from several other lenders to confirm you find the best deal available for you.

Pros

  • Variety of mortgage products for homebuyers and existing homeowners who need to refinance
  • Work with a dedicated loan officer from pre-approval until closing
  • Pre-qualification only requires a soft credit inquiry which won’t damage your credit score

Cons

  • Doesn’t publish fees or rates (aside from general market rates) on website
  • Stricter minimum credit score requirements (620 FICO Score) compared to some other lenders
  • No in-person branch locations

Vault’s Viewpoint on Zillow Home Loans

Zillow Home Loans is an online mortgage lender that offers a variety of mortgage products for homebuyers and homeowners looking to refinance existing home loans. Borrowers may be able to consider several different financing options depending on eligibility, including conventional loans, FHA loans, VA loans, jumbo loans, streamline refinance loans and cash-out refinance loans.

However, the online lender doesn’t offer USDA loans or home equity loans. Fans of in-person mortgages may also want to consider other options since Zillow Home Loans does not have any physical branches.

Although Zillow shares general rate information online, it’s tough to get a specific rate estimate without filling out a pre-qualification request. On a positive note, you can discover if you pre-qualify to get a mortgage with Zillow Home Loans in as little as three minutes. Plus, the pre-qualification process with the online lender only requires a soft credit inquiry—a credit check that causes no damage to your credit score.

It’s also worth noting that the minimum credit score requirements from Zillow Home Loans are a bit stricter than what some other lenders may require. You need at least a 620 FICO Score to qualify for most loans from the online lender. Other mortgage companies may be willing to approve borrowers with a credit score of 580.

About Zillow Home Loans

Zillow is perhaps best known as an online real estate marketplace. Yet Zillow Home Loans operates as an online mortgage lender as well.

The Kansas-based mortgage company was established in 2000 as Mortgage Lenders of America and acquired in 2018 by Zillow Group. Today, Zillow Home Loans helps would-be homeowners who are seeking financing for primary homes, vacation homes and investment properties. Existing homeowners who are looking for refinancing options may find solutions from Zillow Home Loans, as well.

Zillow Home Loans works with borrowers in 49 out of 50 states. Only residents of the state of New York are ineligible to take out a mortgage loan from the online lender at this time.

As an online lender, Zillow allows much of the loan application process to be completed via your computer or mobile device. But at some point, you’ll need to speak with a loan officer. The good news is Zillow Home Loans will assign you a dedicated loan officer to guide you and your real estate agent through the home loan process. This person will be your primary point of contact, from loan application until closing.

Minimum Credit ScoreZillow Home Loans requires a FICO Score of at least 620 for most loan types
Days to CloseAs soon as 21 days after the completion of your loan application and a fully executed purchase contract
Minimum Down Payment3.5% down for FHA loans, 3% down for conventional loans and 0% down for VA loans
Terms Offered30-year fixed, 20-year fixed, and 15-year fixed plus adjustable rate mortgages (ARMs)

Minimum Borrower Requirements

When you apply for a mortgage with Zillow Home Loan, the online lender will require you to meet certain criteria to qualify for financing. The exact requirements you need to satisfy may vary depending on the specific loan program. Below is a general idea of some of Zillow Home Loans’ minimum borrower requirements.

  • Credit score: You should aim for a FICO Score of 620 or above for most mortgages that Zillow Home Loans issues. Some lenders may be willing to work with you if you have a lower credit score. But before you attempt to buy a home with bad credit, it’s often wise to search for ways to improve your credit score first. Getting your credit in the best condition possible before you seek financing can make it easier to qualify for a mortgage and may help you save money with a lower interest rate as well.
  • Debt-to-income (DTI) ratio: Mortgage lenders also pay attention to the percentage of your monthly income that you spend on existing debt obligations, otherwise known as your debt-to-income ratio. Zillow Home Loans doesn’t disclose the maximum DTI ratio you can have and still qualify for a mortgage. But the company’s website does note that a DTI ratio of 36% or under is considered ideal for borrowing and budgeting purposes.
  • Down payment: Depending on the type of mortgage you apply for, you may need a minimum down payment of 3% or higher. The exception to the rule is VA loans which typically don’t require any down payment. However, keep in mind that if you want to avoid paying private mortgage (PMI) insurance on certain types of home loans, you may need to provide a down payment of at least 20% of the purchase price of your home.
  • Income and employment: Unless you’re a recent college graduate, you’ll need to show at least two years of verifiable income and employment history to be eligible for a mortgage with Zillow Home Loans.

How To Apply for a Zillow Home Loan

If you decide a mortgage from Zillow Home Loans is the right fit for your situation, there are two ways to begin the home loan process. You can apply to get pre-qualified for a mortgage online or you can give the online mortgage lender a call at 833-924-2739.

When you start the pre-qualification process, be prepared to provide the lender with details about your home loan, including the following.

  • How soon you wish to purchase
  • Your location (aka ZIP code)
  • Property use plans (primary residence, secondary residence or investment property)
  • The type of property you wish to purchase (such as a single-family home, townhouse, or condo)
  • Estimated purchase price
  • Desired monthly mortgage payment
  • Funds available for down payment and closing costs
  • Estimated credit score range
  • Annual income
  • Information regarding assets (such as bank account balances or retirement accounts)
  • Personal information (including name, address, phone number and email address)
  • Identifying information for a soft credit check (like your Social Security number)

After you submit your initial pre-qualification form, you may hear from a loan officer who can answer questions and collect additional information. If you decide to continue with the loan process, the loan officer may help you complete an official loan application. At that point, you may need to provide documentation to verify your financial information, such as tax returns, bank statements, W2 forms and pay stubs.

It’s also smart to check your credit reports from all three credit bureaus before you apply for a mortgage from any lender. Doing so will give you an idea of where your credit stands, and can let you know if there are any errors or problems on your credit reports you need to address before completing official loan applications.

How Does Zillow Stack Up to Its Competitors?

Depending on your home financing needs, Zillow Home Loans could be a decent choice for a mortgage lender. Yet it’s always wise to look at offers from several lenders before you commit to a specific lender. According to Fannie Mae, comparison shopping could save you thousands of dollars on a home loan.

Below is a closer look at how Zillow Home Loans stacks up to two of its competitors in the mortgage industry.

Zillow Home Loans vs. Rocket Mortgage

Rocket Mortgage, the largest mortgage lender in the United States, is another option to consider if you want an online home loan experience. Not only did the lender earn a spot on Newseek Vault’s best mortgage lenders of 2024 list, but it also ranked second in J.D. Power’s 2023 U.S. Mortgage Originations Satisfaction Study.

Additionally, depending on the loan program, borrowers may be eligible to purchase a home with credit scores as low as 580 with Rocket Mortgage. Most lenders, though, reserve their most competitive interest rates for borrowers with higher credit scores.

It is worth noting that Rocket Mortgage requires you to agree to a hard credit inquiry to receive a customized rate quote. Therefore, it may be a bit more difficult to compare offers from Rocket Mortgage to those from Zillow Home Loans or other mortgage lenders.

Zillow Home Loans vs. Fairway Independent Mortgage Corporation

Borrowers who prefer the option to explore an in-person mortgage experience may also want to consider requesting a rate quote from Fairway Independent Mortgage Corporation. The national mortgage lender serves borrowers in all 50 states and Washington D.C. (however, it does not have physical branches in West Virginia at this time).

Fairway Mortgage has a positive reputation among consumers, ranking number one for borrower satisfaction by J.D. Power in 2023. Plus, the lender offers a few additional loan products that Zillow doesn’t, including USDA loans and reverse mortgages.

Borrowers may be eligible to purchase with a FICO Score as low as 580 for certain types of mortgages. But, again, working to improve your credit score before you apply for a mortgage might put you in a better position to qualify for more competitive interest rates.

Frequently Asked Questions

Is Zillow Home Loans Legitimate?

Zillow Home Loans is licensed to offer mortgages in every state except for New York. Additionally, the online mortgage company is an accredited member of the Better Business Bureau and has an A+ rating with the organization.

What Are the Minimum Down Payment and Closing Cost Requirements With Zillow Home Loans?

As with any lender, down payment and closing costs may differ depending on the type of loan program you choose with Zillow Home Loans. VA loans typically require no down payment. Meanwhile, minimum down payments on conventional loans can be as low as 3%. As far as Zillow Home Loans closing costs are concerned, they tend to range between 3% to 5% of the loan amount.

Does Zillow Home Loans Offer a Preapproval Letter?

Zillow Home Loans offers both prequalification letters and verified preapproval letters to eligible borrowers. Here’s the difference between the two options.

  • Prequalification: Eligible borrowers may prequalify with Zillow Home Loans online in as little as three minutes. This process only requires a soft credit inquiry that will not damage your credit score. Prequalification includes self-reporting of your income and assets and can provide you with an estimate of your loan amount (if applicable).
  • Verified preapproval: Before you start house shopping and making offers to purchase, it’s wise to upgrade your prequalification to a verified preapproval letter. To receive a verified preapproval, you’ll need to provide your loan officer with documentation confirming your income and assets. You’ll also need to agree to a hard credit check, which may impact your credit score. If all of your information checks out and you meet the lender’s minimum qualification criteria, you may be eligible for a verified preapproval letter.
Mr. Cooper Mortgage Review 2024: Online Mortgage Options With Opportunities To Save (2024)

FAQs

Is Mr. Cooper's mortgage reputable? ›

Cooper has a B- rating with the Better Business Bureau, but it is not accredited. In 2021, the Consumer Financial Protection Bureau received 786 mortgage-related complaints about Mr. Cooper. The most common were related to trouble during the payment process and application process and struggling to make payments.

Is there a class action lawsuit against Mr. Cooper? ›

Cooper Agrees to $3.6 Million Class Action Settlement Regarding Pay to Pay Fees. 25 April 2024 – In a significant victory for homeowners, a D.C. federal judge has given final approval to a nearly $3.6 million class action settlement resolving claims that Mr.

What is Mr. Cooper's interest rate? ›

National Average Rates
ProductTodayLast Week
15 year fixed6.51%6.16%
5/1 ARM7.06%7.00%
30 yr fixed mtg refi7.52%6.99%
15 yr fixed mtg refi6.72%6.14%
3 more rows
Apr 6, 2023

What credit score does Mr. Cooper require? ›

The home loans Mr. Cooper offers include: Conventional loans: You'll likely need a credit score of 620 or higher and a down payment of at least 5% to get a conventional loan with Mr. Cooper.

Why is my mortgage being transferred to Mr. Cooper? ›

Your account was transferred because your previous servicer sold your loan to us, your new servicer. It is very common for mortgage loans to be sold between servicers. Hundreds of thousands of loans change hands in this way every year.

What bank is behind Mr. Cooper? ›

Mr. Cooper is a non-bank mortgage lender and servicer that operates throughout the U.S. The lender, formerly Nationstar, offers a number of mortgage options, including low-down payment conventional loans, investment property loans and FHA and VA loans, along with free 45-day rate-locks.

What is the Mr. Cooper controversy? ›

Mortgage loan giant Mr. Cooper is facing a second class-action lawsuit after hackers stole the personal information of 14.6 million customers in late 2023. The latest lawsuit, filed Dec. 22 in federal court in Dallas, accused the Coppell company of being careless with its security of customer information.

What mortgage company did Mr. Cooper take over? ›

Cooper Group Inc. (“Mr. Cooper”) announced today that it has successfully acquired Home Point Capital Inc.

What are the legal issues with Mr. Cooper? ›

Cooper imposed unlawful servicing fees when customers were making monthly payments on their mortgages via phone or online. "The nationwide class consists of borrowers who paid convenience fees to make payment by telephone, less refunds in the amount of $5,617,750," the lawsuit states.

Are Mr. Cooper mortgages federally backed? ›

The answer is yes. The federal government supervises mortgage companies through a host of different agencies, as well as acts enacted by Congress. Here's an overview of how the mortgage lending industry and companies like Mr. Cooper rely on regulators to ensure our customers get fair and square service.

What is another name for Mr. Cooper mortgage company? ›

About Us | Mr. Cooper Home Loans, Formerly Nationstar Mortgage - Refinancing & Mortgage Company.

How many customers does Mr. Cooper have? ›

With more than 25 years of service and more than 4 million customers, Mr. Cooper is the largest non-bank mortgage servicer in the United States.

Is Mr. Cooper a good mortgage company? ›

Minimum Credit Score

Borrowers who can pay 3.5% down on an FHA loan can also qualify with a minimum score of 580. This makes Mr. Cooper a good lender for first-time homebuyers. VA loan applications are evaluated based on a range of factors, and there's no minimum credit score requirement.

Can I stop my mortgage from being sold? ›

Federal banking laws and regulations permit banks to sell mortgages or transfer the servicing rights to other institutions. Consumer consent is not required.

Is Mr. Cooper for people with bad credit? ›

Not to mention, they have programs for people managing credit issues. There are plenty of options to help you learn how to qualify for a mortgage, even with a bumpy credit history. Our mortgage professionals know the ins and outs of the industry and can help you learn more.

Who owns Mr. Cooper's mortgage? ›

Mr. Cooper is owned by Mr. Cooper Group Inc. (NASDAQ: COOP), a publicly traded company since 2012.

How do I know if my mortgage lender is reputable? ›

There are several ways to check if a loan company is legitimate. First, check out the loan company on the Better Business Bureau (BBB) website. Do a quick online search and look up online reviews from independent companies like Trustpilot, if possible.

Are Nationstar and Mr. Cooper the same mortgage company? ›

Nationstar Mortgages, LLC, is the consumer-facing mortgage lender and servicer that operates under the service mark "Mr. Cooper".

Top Articles
Latest Posts
Article information

Author: Rev. Porsche Oberbrunner

Last Updated:

Views: 5411

Rating: 4.2 / 5 (53 voted)

Reviews: 92% of readers found this page helpful

Author information

Name: Rev. Porsche Oberbrunner

Birthday: 1994-06-25

Address: Suite 153 582 Lubowitz Walks, Port Alfredoborough, IN 72879-2838

Phone: +128413562823324

Job: IT Strategist

Hobby: Video gaming, Basketball, Web surfing, Book restoration, Jogging, Shooting, Fishing

Introduction: My name is Rev. Porsche Oberbrunner, I am a zany, graceful, talented, witty, determined, shiny, enchanting person who loves writing and wants to share my knowledge and understanding with you.