Alterra Home Loans Review 2020

Good for: first-time home buyers and those with nontraditional incomes.

Kate WoodOctober 19, 2020

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Our Take

3.5

NerdWallet rating 

The bottom line: Alterra offers low-down-payment loans and will consider nontraditional credit and income sources. However, you'll have to contact the lender for rate information, and its rates and fees are higher than other lenders'.

Alterra

Alterra: NMLS#133739

Min. Credit Score

620

Conventional:

620

Min. Down Payment

3%

Loan Types and Products

Purchase, Refinance, Jumbo, Fixed, Adjustable, FHA, VA, USDA

Pros & Cons

Pros

  • Offers an ITIN qualification path for undocumented borrowers.

  • Has a digital application process.

  • Offers several mortgage options for low- to moderate-income borrowers.

  • Borrowers can qualify with income from self-employment and other nontraditional sources.

Cons

  • No mortgage rates published online.

  • No home equity loans or lines of credit.

  • Generally has higher rates and fees than other lenders.

  • Branch offices not available in all states.

Compare to Other Lenders

Min. Credit Score

640

Conventional:

640

FHA:

640

VA:

640

USDA:

640

Min. Credit Score

620

Conventional:

620

Min. Down Payment

3%

Min. Down Payment

3%

Loan Types and Products

Purchase, Refinance, Home Equity, Jumbo, Fixed, Adjustable, FHA, VA, USDA

Loan Types and Products

Purchase, Refinance, Jumbo, Fixed, Adjustable

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Full Review

Due to the coronavirus pandemic, getting a mortgage may be a bit of a challenge. Lenders are dealing with high loan demand and staffing issues that may slow down the process. Also, some lenders have increased their fees or temporarily suspended certain loan products. If you can’t pay your current home loan, refer to our mortgage assistance resource. For the latest information on how to cope with financial stress during this pandemic, see NerdWallet’s financial guide to COVID-19.

Alterra at a glance

Alterra Home Loans offers a wide spectrum of loan products, including mortgages for those who are self-employed, have income from multiple sources or have no Social Security number. Its app and online portal let you track your loan application, but a lack of rates displayed online means that you have to contact a loan officer to comparison shop. Alterra's rates and fees tend to be higher than those of other lenders.

Here’s a breakdown of Alterra’s overall score:

  • Variety of loan types: 4 of 5 stars

  • Variety of loan products: 5 of 5 stars

  • Online convenience: 5 of 5 stars

  • Rates and fees: 1.5 of 5 stars

  • Rate transparency: 1 of 5 stars

Alterra offers a wide variety of mortgage products with options that include low-down-payment mortgages for entry-level buyers and conventional loans for well-qualified borrowers. Since its founding in 2006, Alterra has grown its operations to cover more than half the country, and has offices in 16 states.

Here's a closer look at Alterra Home Loans and its mortgage offerings.

Alterra Home Loans loan types and products

Alterra is focused on expanding access to homeownership for underrepresented homeowner groups by offering a variety of loans with flexible qualification requirements.

The company’s name, Alterra, is a reference to “alter” or “change” in Spanish. As Alterra puts it in a video on its website, “Serving the underserved markets on the path to homeownership and building wealth through that homeownership is something we take great pride in.”

The same issues that may create roadblocks for people in underrepresented homeowner groups — like not having enough savings for a down payment, not having a traditional credit history or having an unconventional work situation — also make it hard for many younger home buyers to break into the market, Alterra president Jason Madiedo says.

To that end, Alterra Home Loans uses an underwriting model that accommodates borrowers who are self-employed or who live in households where multiple family members contribute to monthly bills.

Alterra also offers an Individual Taxpayer Identification Number (ITIN) loan product to undocumented immigrant borrowers. Qualifying for an ITIN mortgage product is much more rigorous because borrowers must have a 20% down payment, have two years of employment in the same type of work and show two years of tax returns using their ITIN number, Madiedo says. The interest rates for these loans are significantly higher, he adds.

Despite these added costs, Madiedo says Alterra has helped hundreds of immigrant families become homeowners.

At Alterra, you’ll also find the usual stable of conventional fixed- and adjustable-rate purchase loans up to $2 million.

Additionally, Alterra offers several other government loan options, such as VA loans guaranteed by the Department of Veterans Affairs and USDA loans guaranteed by the U.S. Department of Agriculture. However, FHA loans (insured by the Federal Housing Administration) represent the bulk of the lender's government business, Madiedo says.

Alterra doesn't offer home equity lines of credit or home equity loans, but it does have refinancing options across product types, including cash-out refinancing.

Alterra Home Loans online convenience

At Alterra’s site, potential borrowers can complete an online form with basic loan details and contact information. Once that information is submitted, they'll have the option to continue to a full loan application. A loan officer will then contact them to finish the loan approval process. Those who prefer face-to-face service can apply at one of the several dozen Alterra branches in 16 states.

Once a loan file is opened, customers can log in to Alterra’s online loan servicing portal, which is integrated with its mobile app, Pronto. From there, they can track the progress of their loan, upload documents, sign paperwork electronically and have their employment verified online.

Borrowers can also invite others, such as a real estate agent or a relative, to track the loan process with them via the app.

Alterra Home Loans mortgage rates and fees

One of the most important considerations when choosing a mortgage lender is understanding what the loan will cost. In order to provide consumers with a general sense of what a lender might charge, NerdWallet scores lenders on two factors regarding fees and mortgage rates:

  • A lender's average origination fee compared with the median of all lenders reporting under the Home Mortgage Disclosure Act. Alterra Home Loans earns 2 of 5 stars on this factor.

  • A lender's offered mortgage rates compared with the best available on comparable loans. Alterra Home Loans earns 1 out of 5 stars on this factor.

Borrowers should consider the balance between lender fees and mortgage rates. While it's not always the case, paying upfront fees can lower your mortgage interest rate. Some lenders will charge higher upfront fees to lower their advertised interest rate and make it more attractive. Some lenders just charge higher upfront fees.

You can decide to buy discount points — a fee paid with your closing costs — to reduce your mortgage rate. Deciding whether to pay higher upfront fees is a matter of considering how long you plan to live in your home and how much cash you have to apply toward closing costs when you sign the loan paperwork.

Alterra Home Loans rate transparency

One reason Alterra's rates are above average is that it offers loan products that are considered higher-risk. For example, portfolio loans — such as those that don't require a W2 or allow for recent bankruptcy — tend to have higher fees in exchange for having looser qualification requirements. These stay in the lender's "portfolio" rather than being sold to Freddie Mac or Fannie Mae, so the lender retains the risk. ITIN loans, which allow borrowers who are not U.S. citizens to get mortgages, also come with steeper rates.

Potential borrowers who are trying to compare mortgage interest rates across lenders will likely be disappointed: Alterra's website doesn't display that information. You'll need to reach out to a loan officer to get specifics on rates.

NerdWallet’s star ratings for mortgage lenders are awarded based on our evaluation of the products and services each lender offers to consumers who are actively shopping for the best mortgage. The five key areas we evaluated include the variety of loan types and products offered, online conveniences, online mortgage rate information, and the rate spread and origination fee lenders reported in the latest available Home Mortgage Disclosure Act data. To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.