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Consumer Direct Mortgage Review | Credit Karma



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Consumer Direct Mortgage loans at a glance

  • Conventional loans: Yes
  • FHA loans: Yes
  • VA loans: Yes
  • Refinancing: Yes
  • Jumbo loan: Yes
  • Adjustable rates: Yes (5/1, 7/1 and 10/1 ARMs)
  • Fixed rates: Yes (10- to 30-year loans)

Consumer Direct Mortgage is a division of FirstBank, an FDIC-insured bank based in Nashville, Tennessee. It’s a direct online lender with no brick-and-mortar locations — which can be a plus or minus, depending on how you prefer to go through the mortgage process.

But even if you find an entirely online loan process to be less-than-ideal, Consumer Direct Mortgage’s range of mortgage loan options combined with its competitive interest rates and closing cost credits may meet your needs. The lender offers loans for a variety of financial situations — whether you’re a first-time homebuyer, buying a second home or investment property, planning to take out a larger loan, or interested in tapping into your home’s equity for home improvements or other big expenses.

Pros

  • Range of loan options
  • Ability to get an online rate quote before applying
  • Credits that help offset closing costs

Cons

  • No brick-and-mortar locations
  • Doesn’t offer HELOCs, home equity loans or USDA loans
  • Not available in Maryland

3 things to know about a Consumer Direct Mortgage loan

1. Range of loan options

Consumer Direct Mortgage offers a variety of mortgage loan options to meet different needs. Homebuyers can choose from conventional loans, FHA loans for first-time homeowners, VA loans for military families, jumbo loans, and mortgages for second homes and investment properties.

The company also offers rate and term refinance loans for existing homeowners who want to take advantage of lower interest rates or change their loan terms, as well as cash-out refinancing. With this option, you can refinance for a larger amount than your loan balance by tapping into your home equity.

Some mortgage lenders offer home equity loans — sometimes referred to as second mortgages — and home equity lines of credit (HELOCs), but Consumer Direct Mortgage doesn’t. The lender also doesn’t offer USDA loans for people who live in rural areas. If you’re looking for any of these types of loans, you’ll need to consider other lenders.

2. Competitive interest rates

Consumer Direct Mortgage promises “industry-leading” interest rates, and we generally found this to be true.

When we sampled mortgage rates on Consumer Direct Mortgage’s website and compared them to offers you might find on Credit Karma, we found that Consumer Direct Mortgage’s rates beat most of the offers from lenders on our site. But keep in mind that the interest rate you receive depends on a range of factors, such as your credit scores, down payment, loan amounts, loan type and lender.

3. Credits to help offset closing costs

Consumer Direct Mortgage offers lender credits to help offset third-party closing costs. Considering that closing costs — such as appraisal, title, tax, credit report and origination fees — are generally 2% to 5% of your loan amount, these credits could save you substantial money.

According to Consumer Direct Mortgage’s website, the borrowers for 99% of their loans receive some sort of lender credit to help cover the closing costs. When you get an online interest rate quote through the lender, it will also estimate your lender fee credit.

Who is a Consumer Direct Mortgage loan good for?

Consumer Direct Mortgage could be good for homebuyers on a budget who qualify for the lender’s competitive rates and closing cost credits.

This lender may be particularly attractive if you prefer to go through the entire mortgage application process online or over the phone. But if you want the one-on-one experience that a brick-and-mortar location provides, you’ll need to look elsewhere.

And it’s worth noting that Consumer Direct Mortgage doesn’t offer home loans in Maryland. If you live in that state, you’ll need to consider other lenders.

How to apply for a Consumer Direct Mortgage

Consumer Direct Mortgage’s quote and prequalification process takes place online. You’ll start by filling out some basic information to get a rate quote. From there, you can choose the quote that best meets your needs to see a breakdown of the loan, lender fees and credits, and estimated monthly payment.

After reviewing the estimate, you can apply for prequalification online. Just remember that prequalification isn’t a guarantee that you’ll be approved for the loan or that you’ll get the estimated rate and terms. If you decide to submit a complete application and are approved, your rate and terms may change.

Based on your criteria, you may be presented with several loan options. You’ll have the opportunity to compare interest rates and terms and select the offer that’s right for you.

Consumer Direct Mortgage will need several documents to support your application information, including …

  • Your pay stub and tax return information to verify your income and employment
  • A list of your outstanding debt, such as auto loans, mortgages, student loans, personal loans and credit cards, to help calculate your debt-to-income ratio
  • A list of the places you’ve lived in recent years, including landlord names and addresses if you rented
  • Your total assets, including bank and investment account statements and other asset statements, to verify you have enough money for the down payment, closing costs and cash reserves

Not sure if Consumer Direct Mortgage is right for you? Consider these alternatives.

If you want to compare rates with several lenders or your application is denied, keep in mind that you have a window of time where multiple credit inquiries by lenders only count as one for your credit scores. You typically have 14 days to shop around — though it could be longer depending on the scoring model.

  • PNC Bank: This lender might be good if you want to take out a HELOC.
  • Cardinal Financial: This lender could work for you if you want a USDA loan or plan to buy unconventional real estate, such as tiny homes, container homes or manufactured homes.

About the author: Tim Devaney is a personal finance writer and credit card expert at Credit Karma. He’s a longtime journalist who prides himself on being a good storyteller who can explain complex information in an easily digestible wa… Read more.



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