The bottom line: WaterMark offers a good deal of loan choices, but generally doesn’t offer home equity financing; however, that's typical of nonbank lenders.
Pros & Cons
A loan selection that includes co-op, condo, renovation, manufactured home and energy-efficient mortgages.
Minimum credit score of 580 on government-backed loans; 620 for others.
Considers alternative forms of credit, primarily for FHA loans.
Available in about 40 states.
Home equity products are available only for 'piggyback loans.'
Founded just two years before the 2008 housing crash, WaterMark Home Loans, based in Irvine, California, was fortified in its earliest years by tough times. Now a national lender serving 39 states and the District of Columbia, WaterMark distinguishes itself with a large selection of loan options.
'Casting a wider net' of loan services
“It’s kind of a badge of honor for us, that we not only survived but grew through the financial crisis,” Nicholas Joutz, co-founder of WaterMark Home Loans, tells NerdWallet. Joutz says he and Chuck Dragna have “seen it all” since they founded the company in 2006.
One lesson the two learned early on was “casting a wider net” with expanded loan products, including not only conventional loans but government-backed loans — and even reverse mortgages.
An extensive lineup of loan options proves his point.
WaterMark Home Loans mortgage products
There is little that WaterMark Home Loans doesn’t do. You’ll find the usual purchase, refinance, conventional and jumbo loans, in fixed- and adjustable-rate versions — plus, mortgages backed by the Federal Housing Administration (FHA loans) and the Department of Veterans Affairs (VA loans). Watermark recently added U.S. Department of Agricultural (USDA) loans, so you might find info on such products lacking on their website.
But as with most nonbank lenders, home equity loans and home equity lines of credit (HELOCs) are not an option — though WaterMark does offer them in particular situations.
“We do a lot of 'piggyback' HELOCs to help our clients avoid costly PMI,” Joutz says. Known as an 80-10-10 loan, this type of loan combines a first mortgage at 80% of the home’s price with a home equity line of credit accounting for another 10% — along with a 10% down payment. The combination allows borrowers to avoid paying private mortgage insurance premiums.
» MORE: What is an FHA loan?
WaterMark then goes beyond the traditional mix of loan products and services by offering:
Loans to self-employed borrowers.
Co-op and non-warrantable condo loans.
40-year fixed mortgages with 10 years interest-only.
Mortgages for manufactured housing.
Rate locks are available for periods of 15, 30, 45 and 60 days. Longer 90- and 120-day locks require an upfront fee that is credited toward closing costs when the loan closes. WaterMark also offers rate float downs, which allow you to take advantage of a lower interest rate after you lock, if one becomes available.
For first-time home buyers, WaterMark offers a 5% down option for loans up to $1.5 million, and a 10% down mortgage for loans up to $3 million.
Many traditional lenders don’t dabble in reverse mortgages, but WaterMark believes they're a good fit for many of its customers.
A way to withdraw substantial property equity for homeowners 62 and older, reverse mortgages have been re-engineered after years of gaining a reputation for high fees and hard-to-understand risks. However, they can be expensive.
“I am a firm believer Gen X and the millennials will be inquiring more about this product as the baby boomers continue to retire and require financial products to assist their living requirements — as life expectancy has risen, along with health care costs,” Joutz says.
The WaterMark loan process
In most cases, a loan inquiry begins with a phone call. That call can be initiated by filling out a "Contact Us" form or by calling a toll-free number.
The "Apply Now" buttons on the WaterMark website are a little misleading: The "application" is merely a response form for a call back or email. However, you can receive a link to a complete online mortgage application after a contact has been made. A loan officer will provide that link.
Over the past 12 months, the average WaterMark Home Loans customer has had a 768 credit score, with a loan amount of just over $300,000 and a down payment topping 20%, according to the lender. Although typical down payments on FHA and VA loans are much lower.
As for alternative forms of credit — such as considering a 12-month history of utility bill, cell phone and rental payments — these come into play primarily for FHA loans that WaterMark is underwriting. And in most cases, it’s when a borrower has a credit score from only one credit bureau; or none at all, WaterMark says.
Average closing time on a conventional conforming loan is 34 days, Joutz says — a bit faster than the typical closing time of over 40 days, according to mortgage technology provider Ellie Mae. Other loan process conveniences include:
Electronic employment verification.
Online document exchange.
Online loan process updates.
Considering fees and mortgage rates
Some lenders show "national rates" for mortgage shoppers; WaterMark doesn’t. And the typical WaterMark origination charge for a conventional conforming loan is $1,499. That’s not a bargain, but about the national average for a 30-year mortgage.
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at WaterMark Home Loans
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.