TD Bank Mortgage Review 2021
Good for: East Coast residents looking for low-down-payment mortgages, to work with state housing agencies or to get loans for building or remodeling a home.
Our Take
4.5
The bottom line: TD Bank Mortgage gets high marks for its variety of loan products and mortgage types, and excels at online convenience, but could make it easier to find mortgage rates on its site.
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Pros & Cons
Pros
Allows 3% down payment without borrower-paid mortgage insurance.
Offers specialty loans like construction-to-permanent mortgages and medical professional mortgages.
Among the best when it comes to online convenience, including loan process updates.
Cons
Available only in states on the East Coast.
You'll need to fill out a short form to see potential mortgage interest rates.
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TD Bank at a glance
If you live on the East Coast, TD Bank can provide ample mortgage loan products and a digital application experience, backed by personal service. Mortgage rates and fees are some of the most competitive, according to NerdWallet analysis, though TD Bank doesn’t publish sample mortgage rates.
Here's a breakdown of TD Bank's overall score:
Variety of loan types: 5 out of 5 stars
Variety of loan products: 5 out of 5 stars
Online convenience: 5 out of 5 stars
Rates and fees: 4 out of 5 stars
Rate transparency: 3 out of 5 stars
TD Bank Mortgage loan types and products
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.
TD Bank Mortgage distinguishes itself when it comes to specialty products like construction 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."
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.
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.
TD Bank Mortgage 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 online convenience
TD Bank offers an all-digital loan process, supplemented with human guidance. Prospective borrowers can check the status of their loan application, review and upload documents and maintain contact with their loan team.
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, Rodriguez adds.
TD Bank fees and mortgage rates
Lender fees vary by geography and loan product, Rodriguez says.
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. TD Bank Mortgage earns 3 out of 5 stars on this factor.
A lender's offered mortgage rates compared with the best available on comparable loans. TD Bank Mortgage earns 5 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 or not you want to pay higher upfront fees is a matter of considering how long you plan to live in a home and how much cash you have to apply to closing costs when you sign the loan paperwork.
TD Bank Mortgage rate transparency
TD Bank Mortgage rates are not easy to find — in fact, we were only able to locate sample loan rates for Canadian customers. Clicking on a green 'Calculate my rate' button on the bank’s main mortgage page shows a short questionnaire, so a rate-shopping borrower, in a ZIP code TD Bank serves, can get an idea of a mortgage rate they'll earn and request additional information.
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