U.S. Bank has offices in half of the U.S. states, with locations primarily in the central and west parts of the nation. The financial institution says it’s the fifth-largest bank in the country.
According to trade publication Inside Mortgage Finance, the bank is the fifth-largest mortgage lender.
Here’s what to know about U.S. Bank’s mortgages.
AT A GLANCE
- Full line of conventional and government loan programs.
- Serves borrowers in all 50 states, with offices in 25.
- Offers construction-to-permanent and investment property loans.
U.S. Bank home mortgage products
U.S. Bank offers a complete catalog of fixed- and adjustable-rate mortgages, home equity loans and lines of credit, as well as refinancing. All the government-backed loan products — by the Federal Housing Administration, Department of Veterans Affairs and the United States Department of Agriculture — are in play, as well. Construction and lot loans also are available, but only in the 25 states where U.S. Bank has physical locations.
The bank has a few products that may not be available from some smaller lenders. One such product is the simultaneous second mortgage.
“It’s referred to, in industry vernacular, as the 80/10/10,” says Fred Bolstad, executive vice president and head of national retail sales for U.S. Bank home mortgage. “At closing, you’re putting 10% down and [are issued] a 10% second [mortgage] representing the rest of the down payment. So, in most cases, it’s individuals looking to get to an 80% loan-to-value by using a second mortgage rather than putting money in themselves.”
This “piggyback” mortgage typically is used by affluent borrowers, who are in markets with extremely high real estate prices and can’t come up with a traditional 20% down payment. Simultaneous second mortgages give these creditworthy customers an opportunity to buy homes.
U.S. Bank also provides expanded mortgage financing for physicians who are in residencies. Bolstad says this program offers home loans with higher loan-to-value guidelines and some leeway on debt-to-income ratios.
The bank also considers alternative credit sources in some cases.
“You’re going to have certain situations where an individual may not have traditional credit. So, alternative credit could mean looking at utility bills and other things to show that they do have a disciplined pattern in paying bills,” Bolstad says. “It also comes into play for international customers. So, if we have a foreign national that’s being relocated with one of our corporate clients and doesn’t have traditional credit because they’re here on a work visa, in some cases we can utilize other forms of credit to try to help them qualify.”
In addition, the bank offers investment property loans, another product not provided by many smaller lenders.
U.S. Bank fees and mortgage rates
The bank doesn’t charge an origination or application fee. Only third-party fees, such as a credit report charge, appraisal fee and other common closing fees, are passed on to borrowers.
Mortgage rates for many of its loan products are shown on the bank’s website. These are national rates, based on general assumptions, not on your credit score and property details.
To its credit, U.S. Bank publishes sample rates with zero discount points.
Shop mortgage rates with zero discount points to make an apples-to-apples comparison and keep a level playing field. You still can pare your loan’s interest rate by paying discount points (each point equals 1% of the total loan amount).
U.S. Bank home loan process
U.S. Bank offers a basic mortgage pre-qualification process online, with requirements including:
- Your name (and any other buyers’ names).
- Current address.
- Estimated annual household income.
- Estimated monthly household debt expenses.
This is a “back of the envelope” calculation of your debt-to-income ratio. It’s a first step toward determining how much house you can afford. At this stage, you can request a pre-qualification letter to give to your real estate agent.
With a pre-qualification, there is no formal commitment from the bank to issue a loan and you’re not committing to anything, either.
Lenders make a loan commitment only after a preapproval. However, a real-deal mortgage preapproval will require completion of a full mortgage loan application. Currently, you can’t do that online with U.S. Bank.
A new online portal, which is in the pilot stage, is expected to roll out over the next year to allow customers to upload documents, complete an application on a smartphone, verify information and further reduce “the paper chase,” Bolstad says.
What U.S. Bank does best
- No origination fee.
- Borrowers who have U.S. Bank Platinum checking accounts may qualify for up to a $1,000 discount on mortgage fees.
- Mortgage rates published on the website are shown with zero discount points.
Where U.S. Bank falls short
- Online capabilities are currently limited.
- With offices in half of the country, you may not be able to do business face to face.
- Customer satisfaction is below average, according to J.D. Power.
In J.D. Power’s 2016 Primary Mortgage Origination Satisfaction Study, U.S. Bank ranks near the bottom, with a two-out-of-five Power Circle Rating, classified as among “the rest.” The bank got that rating in five categories of the survey — Overall Satisfaction, Loan Offerings, Application/Approval Process, Interaction and Loan Closing — and got a three-circle rating (meaning “about average”) for Onboarding and Problem Resolution.
“The focus on client satisfaction, and really staffing, has been something that really started in earnest in January. So I think we were a little bit behind at the beginning of the year,” Bolstad says. “We’ve made up great ground, and I would really anticipate as the next one of those comes out that we’ll start moving in the right direction.”
U.S. Bank faces the same staffing challenges as do most large banks: striking a balance between having enough employees to service customer demand while remaining profitable. And mortgage demand is constantly in flux.
If U.S. Bank can improve customer satisfaction and continue to offer a large home loan product mix, it likely will remain one of the nation’s largest mortgage lenders.