CitiMortgage Loan Review 2022 – Forbes Advisor – Forbes

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Published: Oct 25, 2022, 4:00am
Originally founded in 1812 as City Bank of New York, Citigroup Inc. is a multinational holding corporation based in New York City. It provides a wide variety of banking and lending services through its consumer banking arm, known as Citibank (usually shortened to Citi).
One of Citi’s offerings is purchase and refinance mortgage loans, which it manages through its subsidiary CitiMortgage. In the second quarter of 2022, the company originated $5.3 billion in mortgages. With CitiMortgage, borrowers can access conventional and jumbo mortgages. Loans backed by the Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) are also available—but if you’re interested in a mortgage backed by the U.S. Department of Agriculture (USDA), you’ll need to consider other lenders.
CitiMortgage once also provided home equity loans and home equity lines of credit (HELOCs). However, it temporarily suspended applications for these products on March 3, 2021, due to the financial impact of the Covid-19 pandemic and has not yet resumed these offerings.
CitiMortgage offers home loans in all 50 states. As of Sept. 2, 2022, the company’s rates are lower than national averages.
However, while the company provides sample purchase and refinance interest rates on its website, these are based on a $200,000 primary residence with a $150,000 mortgage. Considering that the median home in Los Angeles costs nearly $1 million, these rates might not apply to your situation. To get a more accurate rate, you’ll need to call the company.
CitiMortgage offers the following types of home loans:
In addition to fixed-rate products, CitiMortgage offers adjustable-rate mortgages (ARMs) with repayment terms from three to 10 years. However, while FHA and VA loans are available through CitiMortgage, you’ll need to consider other lenders if you’re interested in a USDA loan. Also remember that applications for home equity loans and HELOCs have remained suspended as of September 2022.
Additionally, new or existing CitiMortgage customers who open a deposit account before their mortgage loan closes can qualify for $500 off their closing costs with an account balance of $1 to $49,999.99 or discounts on their rate with higher balances. Note that you must maintain this balance for five to six business days (depending on account type) following approval as well as set up automatic payments on your mortgage from your deposit account to be eligible for these benefits.
Closing cost assistance of up to $7,500 is also available for low-income borrowers who live in certain areas.
CitiMortgage doesn’t publicly disclose its minimum loan amount. If you’re looking for a small mortgage loan to pay for a less expensive home, you’ll have to contact CitiMortgage to see if it can accommodate your needs.
The maximum you’ll be able to borrow will depend on the type of mortgage you want as well as your financial qualifications. CitiMortgage offers jumbo loans to eligible borrowers, which typically range up to $647,200 for a single-family home in most areas and up to $970,800 in high-cost areas like New York City and San Francisco.
To find out the loan maximum you might qualify for, you’ll need to contact CitiMortgage.
Here are the basic eligibility requirements to expect if you take out a mortgage with CitiMortgage:
CitiMortgage doesn’t publicly disclose its minimum credit score requirements for most of its mortgage products outside of VA loans, for which you’ll need a score of at least 620.
Mortgage lenders typically require a credit score of at least 620 for conventional loans, 680 for jumbo loans and 580 for FHA loans. But you’ll need to contact CitiMortgage to see what credit score you’ll need to qualify for these products.
CitiMortgage’s minimum down payment requirements vary by loan type:
Note that CitiMortgage’s HomeRun mortgage program—which can be utilized to purchase or refinance a home—allows borrowers in certain areas to make down payments as low as 3% without needing to pay for private mortgage insurance (PMI). A conventional loan, on the other hand, requires a down payment of at least 20% to avoid PMI.
Your DTI ratio is the amount you owe on monthly debt payments compared to your income. CitiMortgage doesn’t publicly disclose its maximum acceptable DTI, but it does note that DTI requirements might be different for jumbo loans compared to other products.
Typically, your DTI ratio should be no higher than 50% to qualify for a mortgage—though some lenders might require lower ratios than this. Lenders are more likely to allow a higher DTI ratio if you have a high credit score and make a larger down payment.
To see what DTI ratio you should aim for with CitiMortgage, you’ll need to contact the lender.
CitiMortgage is not transparent about its mortgage fees. Like with its requirements, you’ll need to contact the company to see what fees you could be charged, such as origination fees, rate lock fees or prepayment penalties.
CitiMortgage might cover up to $7,500 of your closing costs through its Lender Paid Assistance program. To be eligible, you must be buying a primary residence in a Citi Assessment Area (an area that has Citi branch locations that accept deposits) or in a specified census tract located in one of the following areas:
You’ll also need to make less than 120% of the median family income in your area or be buying in a low- to moderate-income census tract if your home is in a Citi Assessment Area. Lastly, you’ll have to complete a homebuyer education course from a Citi-approved housing counseling agency.
CitiMortgage doesn’t offer a fully online application. Instead, you’ll need to call (or request a callback from) a loan officer or visit one of its branch locations. You can also use the search tool on the company’s website to find a loan officer near you.
Keep in mind that CitiMortgage doesn’t appear to offer a secure online portal where you can upload loan documents like bank statements and W-2s. Instead, the company asks customers to download and install third-party software to encrypt files for documents they wish to send via email. Note that this software costs $39.95 to $59.95, though you can sign up for a free 30-day trial.
Unlike most lenders, CitiMortgage has a specific, trademarked name for its preapproval process: SureStart® Pre-Approval. The company promises a “firm commitment to lend” through this program.
It isn’t clear whether SureStart is a typical preapproval program or a more comprehensive preunderwriting program. If it’s a preunderwriting program, it could help you make a stronger offer and close faster since the lender gives you a definite amount you can borrow after thoroughly reviewing your finances. However, CitiMortgage doesn’t clarify this, instead stating only that it’s a superior alternative to prequalification.
CitiMortgage also doesn’t disclose its average approval or processing timelines, and it doesn’t appear to offer an on-time closing guarantee. It typically takes 30 to 60 days to close on a mortgage, but you’ll have to contact CitiMortgage to see what to expect.
If CitiMortgage denies your application, ask your loan officer for the specific reasons that led to the decision so you can see what areas you need to improve. For example, you might not have sufficient income, a high enough credit score or a low enough DTI ratio. In these scenarios, you could focus on increasing your income, building your credit by paying all of your bills on time or paying down debt to reduce your DTI ratio, respectively.
You could also consider applying with a creditworthy co-signer or co-borrower to increase your approval chances. However, asking someone to share responsibility for a mortgage is a big deal, especially if they won’t be living in the home. To get an idea of what you can afford on your own, use our mortgage calculator.
Some mortgage lenders have less stringent requirements than others, so if you can’t qualify with CitiMortgage, you might still get approved by another lender. In any case, it’s best to shop around and compare your options from as many lenders as you can so you can find a good deal more easily.
Don’t worry about hurting your credit score this way, either. Submitting multiple applications within 45 days will have the same impact on your score as submitting a single application, according to the Consumer Financial Protection Bureau (CFPB).
As of Octt. 19, 2022, CitiMortgage’s Better Business Bureau (BBB) rating is 1.05 out of 5 stars based on 556 customer reviews. The BBB has closed 2,235 complaints about the company in the last 12 months and 6,480 complaints in the last three years.
CitiMortgage is not BBB accredited and has received an F rating from the BBB. Note that this rating doesn’t take customer reviews into account. Instead, it’s based on how the company responds to complaints, its size, time in business and other factors.
The CFPB’s Consumer Complaint Database shows 677 mortgage complaints about Citi’s mortgage offerings from September 2018 through September 2022. Most complaints were about applying for a mortgage, closing on a mortgage or trouble during the payment process. The company provided a timely response to all complaints.
Keep in mind that the CFPB doesn’t verify the accuracy of consumers’ complaints. Additionally, while these numbers might seem high, they’re insignificant compared to the number of customers utilizing CitiMortgage’s services.
However, CitiMortgage has also been subject to several regulatory actions related to its treatment of mortgage borrowers. Here are two recent examples:
In 2017, the CFPB ordered Citi subsidiaries—including CitiFinancial Servicing and CitiMortgage—to pay $28.8 million in civil penalties and compensation to customers for “giving the runaround to struggling homeowners seeking options to save their homes,” according to a CFPB press release.
The CFPB said the company violated several federal consumer protection laws by not only failing to provide options to borrowers trying to avoid foreclosure but also by burdening borrowers with excessive paperwork demands when they wanted to apply for foreclosure relief.
In 2019, California’s Department of Business Oversight reached a settlement with CitiMortgage that required the company to pay $7.8 million to more than 94,000 California homeowners, according to California’s Department of Financial Protection and Innovation. This was due to CitiMortgage failing to pay interest to the homeowners on escrow account balances for residential mortgage loans as required by California state law.
We graded CitiMortgage based on elements that have a meaningful impact on the cost of the mortgage; borrower eligibility requirements; the variety of loan options; and loan features that can impact the homebuying process. Our scoring method is based on the following categories:
While there are certainly more features that lenders offer, we chose not to include these in our scoring in order to bring forward lenders that have the most competitive rates and are among the most accessible for borrowers of all financial backgrounds.
Our focus on affordability, accessibility, and key features that can impact the homebuying process (like preapproval time and closing timelines) is what we consider reflective of today’s consumer’s top priorities when comparison shopping for mortgage lenders.
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