Citi Mortgage Review 2019
Rating: 3.5 stars out of 5
The Smart Investor reviews are unbiased, and reflect the views of our editorial staff. We’ve collected the information independently. Issuers did not provide the details, nor are they responsible for their accuracy. The review is not a recommendation, the actual rates/fees may be different.
Purchasing a home is likely the most significant investment that most of us will ever make in our lifetimes. Selecting a lender who shadows your values and earns your respect for their integrity and compliance is essential.
On a positive note, CitiMortgage makes it very easy to reach them via phone, which can’t be said for all lenders or all websites.
CitiMortgage rates are posted online and they meet the average rates across the board with other lenders. Online calculators are available for loan amounts, estimated closing costs, mortgage payments as well as refinancing and equity options. There is even a calculator to help you understand the impacts of making extra payments throughout the term of your loan.
In the event you need help meeting payment demands or find yourself facing foreclosure, their user-friendly website offers you insights regarding the proper steps to take under these challenging circumstances. The homeowner’s support site also provides perspectives into recognizing loan assistance scams that plague consumers who are under struggling circumstances.
- Homerun special plan
- Pre-approval options
- Discounts available
- Flexible requirements
- Not full online lender
- High Fees
- High DTI Ratio required
- “Overselling” approach
CitiMortgage was founded in 1979 and is headquartered in O’Fallon, Missouri, minutes west of St. Louis and their dream is to help make the American dream of homeownership a reality across the country. As part of the parent Citigroup organization, their mortgage products cover a wide range of opportunities for everyone from first-time homebuyers to new construction to refinancing or capitalizing on the equity you have already built into your current home.
Getting the right consumer into the right product is all part of the process to meet your goals with the Citi family portfolio of services, which also includes personal and commercial banking, credit cards, insurance, and asset management.
What’s the big deal about products? The right (or wrong) product can end up costing you more money, more stress, increased worry and can also alter your life based on how the economy acts, reacts and morphs into very different arenas. Let’s quickly review CitiMortgage’s portfolio of products:
Fixed Rate Loans: Your mortgage rate can never change, no matter how interest rates in general move. Terms generally run ten, 15 and 30 years. The shorter term means you will pay off your home faster; however, your monthly payments will be higher. Be sure to know what you can afford each month.
Adjustable Rate Loans: (ARMs) allow the borrower to begin their lending relationship with a fixed rate for a defined amount of time, after which the rate will adjust to the market, which can be painful for the consumer because rates tend to rise. Be alert to the initial time frame, because if you plan to pay off your mortgage or sell your home before the adjustable period kicks in, this could be the right option for you. You will see references to 3/1 or 5/1 ARMs, which tells you that the initial fixed period will be three or five years, and then rates will adjust annually. If you are required to transfer periodically with your career, an ARM may be viable.
VA (Veterans Administration) Loans: are reserved solely for current and former members of our military forces. You can expect lower rates, lower closing costs, and lower down payment requirements.
FHA (Federal Housing Authority) Loans: are backed by the Federal Government and are most compatible with consumers who have:
- Lower credit scores.
- Low down payment ability (less than 20 percent).
- Short employment history or are self-employed.
- Never bought a home.
Jumbo Loans: are those who have limits greater than those set by Government Sponsored Enterprises (GSEs), like Freddie Mac or Fannie Mae. Be alert to the possibility of larger down payment needs as well as higher interest rates.
Loan amounts ranging from a minimum of $10,000 to $8,000,000 in all 50 states. You can use our extensive set of calculators determine which of the loans are better for you, whether to get an ARM or fixed rate mortgage, how much home you can afford, whether to make extra payments and more.
Specific CitiMortgage fees follow, based on a $148,000 loan amount at 4.875%:
|Application Fee||$175||Percentage of the loan, 1.5%|
|Commitment Fee||$915||Percentage of the loan, 4%|
|Appraisal Fee||$410||You cannot shop for an alternative fee.|
|Credit Report||$21||You cannot shop for an alternative fee.|
|Flood Certification||$5||You cannot shop for an alternative fee.|
|Tax Service||$87||You cannot shop for an alternative fee.|
|Property Report||$210||You may shop around for a better fee.|
|Closing Letter||$20||You may shop around for a better fee.|
|Title Insurance||$450||You may shop around for a better fee.|
|Settlement||$450||You may shop around for a better fee.|
|Recordation||$550||Varies (government fee)|
- No prepayment penalty.
- Escrow for taxes and insurance.
- You may have to add in prepaid interest as needed, which would be a per diem amount based on your loan amount and rate.
- You can finance some of your closing costs.
CitiMortgage – Advantages, Disadvantages & Tips
In very general terms, as you approach the mortgage process, there are a few things to keep top of mind:
- Check your credit, stronger is better (and it impacts your interest rate).
- Know what you can afford.
- Work to build your savings balance.
- Shop, ask questions, understand risks and implications, act, be patient, responsive and vigilant.
There are different types of lenders: credit unions, community banks, big banks, and brokers. All are really a matter of opinion and who or what makes you feel the most comfortable.
CitiMortgage – Pros
Homerun special plan: CitiMortgage offers a HomeRun product, which is only available from their organization. Benefits include:
- Three percent down payments.
- Flexible credit guidelines.
- No private mortgage insurance (PMI) requirements.
- Jumbo amounts available up to $675,000, depending on the location.
- Rates compatible with those of a conventional loan.
- Ownership counseling and education.
Preapproval options – CitiMortgage will pre-approve you for a mortgage, which is better from the consumer perspective than a prequalification. Preapproval saves time because it helps you hone in on the correct price range for you, it also provides you an edge with real estate agents and sellers. Your bid will get more attention.
Discounts available – If you have other Citi Group products already / automatic payment on your approved loan, you can expect a quarter percent discount on your interest rate.
Flexible requirements – Citi Group’s asset size allows it the luxury of relying on their own money to fund loans, which allows them to be less strict about lending requirements in some cases. However, be aware that just because CitiMortgage either approves or denies your mortgage, it is not an indication that other lenders will make the same decision.
Apply Online – CitiMortgage allows you to apply online or speak with a professional at a location near you, schedule an appointment or a phone call.
CitiMortgage – Cons
“Overselling” approach – The nature of the banking business lends itself well to cross-selling. Expect anyone you meet with at CitiMortgage to cross-sell you on any number of other Citi Group products. From the bank’s perspective, the more products and services you have, the less likely you are to move to another financial institution.
High DTI Ratio required- CitiMortgage expects a debt to income ratio of 50 percent or less.
Not full online lender – The entire process at CitiMortgage does require interaction other than online.
High Fees – City has many different fees, most of them are higher coimpared to the market, for example – be prepared to pay $21.95 up front at application for the lender to pull your credit report.
CitiMortgage – From Our Experience
Last, we donned our dark glasses and trench coat to take a mystery shopping trip and here are our facts (don’t you love this cloak and dagger stuff):
We initially applied online with the online promise of receiving a call from a qualified lender. We waited five days for that call and it never came. Then, we called the CitiMortgage origination number online to gather added intel.
We sat on the phone for 22 mins, spoke with four individuals each of whom attempted to transfer us to a lender. Four transfers later and answering the same series of questions four times, we finally made it to a lender. Not a good customer experience.
When we reached the lender, we had to take time to adjust a horrible phone connection; however, after that passed the lender was very professional and pleasant and after about 46 minutes, we got an approval and a good faith estimate. The lender seemed genuinely interested in finding the right solution for our needs and offered suggestions for improvement as well as options for improved pricing based on the higher quality of our credit scores.
It took eight attempts to finally access the welcome package, which took about seven business days when it should have been accomplished in one. The excess time, we attribute to weekends, employee time away from the office and encrypted document access errors on the bank’s part.
Not the best possible experience, but also not the worst.