Stearns Lending Mortgage Review

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Stearns Lending has some great options for first-homebuyers. However, the lack of mortgage rates and fees information online makes initial research difficult.

J.D. Power Rating

N/A

Min. Credit

620

Min. Down Payment

3%

SimpleScore

3.5 / 5.0

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SimpleScore Stearns Lending 3.5

Perks 4

Credit Impact 4

Customer Satisfaction N/A

Product Variety 5

Fees 1

Our Methodology

Headquartered in Santa Ana, California, Stearns Lending was founded by Glenn Stearns in 1989. Although it filed for Chapter 11 bankruptcy protection in July 2019, it has since been financially restructured. It currently provides home loans to 49 states and the District of Columbia.

The great thing about Stearns Lending is that it makes homeownership more accessible for first-time buyers, as some mortgages require only a 3% down payment. What’s more, many Stearns Lending mortgages can be paired with state-run financial assistance programs that help borrowers with down payments. There are lots of purchase and refinancing products to choose from, and its website has plenty of buying and selling tips to up your knowledge.

*Rate based on 300,000 with a 10% down payment. 

Stearns Lending at a glance

What we like about it

The biggest strength of Stearns Lending is that it offers many government-backed low-down-payment loans. Additionally, it operates a program allowing doctors and dentists to qualify for a mortgage with a down payment as low as 5% while also having certain student loan payments excluded from their debt-to-income ratio.

Another positive feature often cited in Stearns Lending reviews is the ability to lock in an interest rate for an agreed period. The move comes with a fee but can potentially save you money if the interest rate increases. It can also make mortgage payments more predictable.

You can begin an application online or through your mobile for added convenience. We like the tools and resources on the Stearns Lending website too, as they cover the buying and selling process comprehensively.

Things to consider

While the Stearns Lending blog has general information about the kinds of home loan fees you can expect in the buying process, its actual fees are not available on its website. You won’t find information on Stearns Lending mortgage rates, either. This means you’ll need to speak to a loan officer even when you’re doing initial research, and it can make it difficult to compare mortgage rates and terms between lenders to find the best mortgage for you.

In terms of products, despite offering an extensive range of purchase and refinancing options, Stearns Lending does not provide home equity loans or HELOCs.

Another potential drawback concerns the speed of the mortgage application process. After registering your interest, you may have to wait up to three business days for a loan officer to contact you. Finally, Stearns Lending mortgages are not available in New York.

What you need to know

For a conventional home loan, you can choose between five, seven or 10 years for adjustable-rate and 10 to 30 years for a fixed-rate loan. Options for FHA and VA loans are five years for adjustable-rate and 15, 25 and 30 years for fixed-rate. USDA loans are fixed-rate and 30 years in length, as are FHA 203(k) loans. Buyers in high-cost areas requiring jumbo loans have a choice of 15- or 30-year fixed-rate and five-, seven- or a 10-year adjustable rate.

You can potentially lower payments for an existing mortgage with conventional fixed refinancing over 25 or 30 years, or adjustable refinancing over 5 years.

While minimum and maximum loan amounts are not available on the lender’s website, Stearns Lending suggests borrowers can potentially qualify for a loan with up to 50% of their monthly income used to pay current debts.

Stearns Lending encourages potential borrowers to register their interest and speak to a loan officer for tailored solutions.

Here is how you can get started with an application for a Stearns Lending mortgage:

1. Click the “Get Started” button on the Stearns Lending website.
2. Answer the following questions:
   • Are you making a purchase or refinancing?
   • What is the purchase price and your down payment?
   • Where is the property located?
   • Do you currently own a home?
   • Are you eligible for military financing?
   • Are you buying a single-family residence, condo or multifamily property?
   • Will this be your primary, secondary or investment home?
3. Enter your contact information then submit your inquiry.
4. Wait for a loan officer to contact you.

Fees and penalties

Stearns Lending charges a number of fees, but these can vary depending on the state you’re in. Specifics on charges and penalties are not posted on the lender’s website, but typical fees include an appraisal, application and processing, underwriting, loan origination, rate lock and third-party services.

If you have an FHA loan, you’ll have to pay 1.75% as an FHA Up-Front Mortgage Insurance Premium, but this can be rolled into the mortgage.

Collateral and criteria

You’ll need a minimum FICO score of 620 to qualify for a conventional Stearns Lending mortgage. As mentioned, down payment can be as little as 3%, but you’ll need to buy private mortgage insurance if your down payment is less than 20%. For an FHA loan, you’ll need a minimum FICO of 580 plus a down payment of at least 3.5%. USDA loans do not require a down payment, and the same applies for some VA loans.

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