The Bottom Line: TD Bank offers low-down-payment mortgages and flexible construction loans for customers in its East Coast footprint.
Pros & Cons
Allows 3% down payment without borrower-paid mortgage insurance.
Helps borrowers find help from state and local housing authorities.
Emphasizes construction-to-permanent mortgages.
Purchase-and-renovation loans with more flexibility than the FHA offers.
Available only in states on the East Coast.
The loan process is not executed online.
Canadian-born TD Bank Mortgage also serves home buyers in a portion of its southern neighbor nation, choosing to focus on the American East Coast. Nevertheless, TD Bank Mortgage offers a full range of home loan products — basically everything but reverse mortgages.
Here’s how TD Bank Mortgage serves East Coasters.
TD Bank Mortgage construction-to-permanent loans
TD Bank Mortgage distinguishes itself when it comes to homebuilding loans, according to Ray Rodriguez, a regional mortgage sales manager.
"In a lot of areas, we see the need for construction lending,” Rodriguez says. “Whether that's somebody who buys a raw piece of land and wants to build a house on it — or buys an older home and wants to purchase it and renovate it at the same time."
TD Bank Mortgage reported a 54% increase, year-over-year, in the dollar amount of construction loans from 2015 to 2016.
A construction-to-permanent loan from TD Bank Mortgage allows you to lock your interest rate and finance the construction costs and your mortgage with a single loan closing. And you make interest-only payments during the building phase. After that, you'll make regular mortgage payments.
» MORE: Use our mortgage calculator to find out your monthly mortgage payment.
Construction loans can also be used if you buy a home that needs a little remodeling, allowing you to roll the costs of improvements into your permanent mortgage.
Combining a purchase loan and renovation costs into one mortgage often means tapping an FHA 203k loan. But Rodriguez says that unlike 203k loans, the TD Bank Mortgage loan program uses an underwriting process that allows the lender to focus strictly on the borrower's qualifications.
"In a 203k loan, they want to look into the builder's financials as well," Rodriguez explains. Many builders had tough times as a result of the housing crisis and may not have fully recovered to this day, he says. "We just focus on underwriting our customer."
And there are no FHA loan limits to consider with TD Bank Mortgage’s purchase and renovation loan.
Loan programs for a range of incomes
TD Bank Mortgage works with local housing authorities to help low- to moderate-income customers find down payment and other home-buying assistance. And it participates in the HomeReady loan program backed by Fannie Mae, which allows income-eligible borrowers to qualify for a home loan with as little as a 3% down payment.
In addition, TD Bank Mortgage launched its own low- to moderate-income loan program, the Right Step Mortgage, which also allows a down payment as low as 3% but doesn't require borrower-paid mortgage insurance, as the HomeReady and FHA programs do.
Wealthy customers will also find loan programs tailored to their needs. With so many customers living in the hypercompetitive real estate markets in the urban areas of the East Coast, TD Bank Mortgage has not shied away from jumbo mortgages — higher-value loans that are not sold to investors like Fannie Mae and Freddie Mac but rather held on the bank's books.
TD Bank Mortgage loan process
The TD Bank Mortgage process is not executed online. The website has no online application, pre-qualification process or electronic document exchange, though some web-based improvements are "slated for late 2017."
Rodriguez says the loan process is driven by customer preferences. He gives an example of a Wall Street trader who may prefer to handle loan details primarily by email and phone. That contrasts with the "touch and feel" customer who might rather deal with such a large transaction face-to-face in a TD Bank branch.
There are no minimum or maximum mortgage limits, but "if somebody needs a $20,000 loan, maybe a mortgage is not the best product for them," Rodriguez adds. Perhaps that customer would be better served by a home equity line of credit instead, he says.
Considering fees and mortgage rates
Lender fees vary by geography and loan product, Rodriguez says. TD Bank Mortgage interest rates are shown on the website for a couple of products, but with the completion of a short questionnaire, a rate-shopping borrower can request additional information.
NerdWallet's star ratings for mortgage lenders are awarded based on our evaluation of the products and services that lenders offer to consumers who are actively shopping for the best mortgage. The six key areas we evaluated include the loan types and loan products offered, online capabilities, online mortgage rate information, customer service and the number of complaints filed with the Consumer Financial Protection Bureau as a percentage of loans issued. We also awarded lenders up to one bonus star for a unique program or borrower focus that set them apart from other lenders. To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.