CitiMortgage Review: Best Option For Citibank Customers
As one of the best and largest banks in the world, New York-based Citigroup offers many financial and investment services to its customers, ranging from credit cards to savings accounts.
One of their many divisions originates mortgage loans under the name CitiMortgage. Owing to the size and experience of Citibank in the financial services industry, CitiMortgage offers a very broad range of home loans catering to many different home buying needs.
In this Citi Mortgage review, we’ll discuss how well they perform as a mortgage lender. We’ll first explain our reviewing criteria, and then examine how CitiMortgage performs in each of those categories. We’ll also sum up their strengths and weaknesses so you can decide whether borrowing from CitiMortgage suits your needs.
How We Review Lenders
Throughout the review, we’ll examine how the lender performs in these five categories.
Loan Options Offered
To better understand a mortgage lender’s home loan offerings, here’s an explanation of the most common loan types.
Fixed-Rate Mortgage
This is the most common type of conventional loan and one of the best options for first-time homebuyers. A fixed mortgage allows the borrower to enjoy a static interest rate for the loan’s entire life, which also means that their monthly payment amount won’t increase regardless of fluctuations in the market. They’re popular because of their simplicity and predictability, allowing for easier long-term financial planning.
Adjustable-Rate Mortgage (ARM)
Another subtype of the conventional mortgage, adjustable-rate mortgages feature an interest rate that rises and falls according to a market index chosen by the lender. Generally, your mortgage rates will be adjusted every year after a certain period of fixed mortgage rates.
The period of fixed mortgage rates on each ARM is usually mentioned in the loan term. For example, a 5/1 ARM means that you’ll have five years of fixed interest rate before your mortgage rates adjust each year. Due to fluctuating interest rates, this type of loan has unpredictable monthly payment amounts.
Jumbo Mortgage
If you’re looking to buy an expensive home, your best option is a jumbo mortgage. Jumbo loans exceed loan amount limits set by the Federal Housing Finance Agency (FHFA) and bear more risk for the lender, so you may experience higher interest rates and a larger monthly payment amount. These typically also have a higher credit score requirement.
Government-Backed Mortgage
The federal government offers homebuyer assistance programs in the form of government-insured loan products. These loans include:
- FHA loans for low-to-mid-income borrowers
- USDA loans for rural residences
- VA loans for military personnel
Generally, these mortgage products have lower credit score and down payment requirements compared to conventional loans, as well as a more competitive interest rate. However, you may need to pay extra fees and fulfill several strict criteria to qualify for these loans. You’ll also have to adhere to loan amount limits on these mortgages.
Refinance Loans
In a refinance, you take out a new mortgage to pay off your old one. Generally, refinancing is done to change your loan’s type – for example, from a fixed-rate loan to an adjustable-rate one or vice versa. You can also use it to lengthen or shorten its term, like from a 30-year fixed-rate loan to a 15-year fixed-rate loan or vice versa.
While a refinance can help you take advantage of lower market rates, you can also take out a refinance to convert some of your home equity into cash – this loan is called a cash-out refinance.
Since refinancing means that you’re taking another loan, you should ensure that your credit score looks its best when you apply for a refinance.
Rate And Fee Information
One of the most important things to have when comparison shopping for a mortgage? Complete information on mortgage rates and closing cost breakdowns. If a lender provides easy access to their rates and fees, it’ll be easier as a borrower to see who offers the best rates. It also makes it easier to estimate your monthly payment.
Online Application And Features
With most mortgage lenders starting to increase their online presence and services, simply having an online mortgage application form isn’t enough. That’s why we examine the lender’s full suite of online services, ranging from application forms to other online features that may help borrowers complete and manage their loans.
Service And Branch Availability
While online features are important, the availability of branch offices is equally essential, especially if you prefer face-to-face interaction with the bank’s staff. For this criterion, we examine the lender’s number and spread of branch offices and whether the company serves mortgage needs in all 50 states.
Customer Satisfaction
We examine how the lender fares from a customer service standpoint, using consumer review studies and reports. In our Citi Mortgage review, we use reports from organizations like J.D. Power, the Better Business Bureau, and the Consumer Financial Protection Bureau.
CitiMortgage Review
CitiMortgage (NMLS ID# 412915), founded in 1979, is a subdivision of financial giant Citigroup that focuses on home loans and mortgage products. However, the Missouri-based lender announced in 2017 that it will stop servicing mortgages.
So when you get a mortgage loan from CitiMortgage, Citi is only responsible for originating the loan. The mortgage itself will be serviced by New Residential Mortgage or Cenlar, two companies that manage loans on behalf of Citi.
Citi Mortgage Loan Products
Par for the course as a lender operating under a major bank, Citi Mortgage provides a broad variety of mortgage loans to potential borrowers. These products include:
- Conventional fixed-rate loans with 15-year, 20-year, and 30-year terms
- Adjustable-rate mortgages with 5/1, 7/1, and 10/1 terms
- Jumbo loans
- Home equity loans and home equity lines of credit (HELOC)
- Mortgage refinance in fixed-rate and adjustable-rate terms
If you choose a conventional loan, you can have a debt-to-income (DTI) ratio of 43% and pay as little as 3% down. However, you’ll need to provide a 20% down payment to avoid private mortgage insurance. You also need to have a minimum score of 620 on your credit report.
Citi also offers FHA loans with relaxed credit score requirements. Generally, you’ll only need to pay 3.5% down if you have a credit score of 580 and above. You may also qualify if your credit score is between 500-579 as long as you pay at least 10% down. In addition to your monthly payment, you’ll also need to pay for insurance on these mortgages.
If you’re a veteran or active-duty military service member, Citi offers VA loans. These loans feature no down payment and may award you some credit toward closing costs. However, you’ll also need to pay funding fees that replace insurance for these mortgages.
In addition to the common loan types, Citibank also offers a proprietary mortgage program called HomeRun which is geared for low-to-moderate-income borrowers. If you apply for a HomeRun mortgage, you can pay as low as 3% down without having to pay for private mortgage insurance. You’ll need to conform to FHFA loan amount limits on these mortgages.
However, a HomeRun mortgage has several qualification requirements. To qualify for it, you need to earn under 80% of the area’s median income and have a minimum credit score of 640. Additionally, you can only take out a HomeRun loan if you use it to buy your primary home. You’ll also need to complete a homeownership education course.
A major advantage of borrowing from Citi is that they accept non-traditional credit profiles. If you have a limited credit history, the bank can use other methods to establish a credit profile, such as your payment history for utility bills.
Rate And Fee Information
The Citibank home mortgage page provides sample rates and fees, as well as a monthly payment estimate that you can use to compare them with other lenders at first glance. However, the information on these mortgage rates and the monthly payment estimate is somewhat limited since they only offer information on 15-year and 30-year fixed-rate loans.
In addition to the limited mortgage loan types, these rate and payment samples are given using specific locations, and credit scores. They also assume that the borrower bought discount points and don’t give a breakdown of the fees that you’ll need to pay upon closing.
Online Application And Features
Citi has an intuitive online application process. First, you can get an estimate of your loan’s cost using the mortgage selector by entering the property’s price and type, your mortgage loan amount, as well as your credit score. Once you’ve done that, you’ll be presented with the loan options that best fit your needs.
However, you cannot complete the entire process online. After you’ve filled out the form, you’ll need to speak to a loan officer to finish the process. However, once the application is finished, you can monitor its progress and upload documents online.
In addition to the fixed sample rates, the website also provides a host of tools on the Citibank mortgage page to help you calculate various aspects of your loan (e.g. monthly payments, refinance savings, and home equity growth).
Service And Branch Availability
As the subsidiary of major financial institution Citibank, CitiMortgage provides mortgages for all 50 states and the District of Columbia, as well as Puerto Rico. However, Citi only has 700 branches across the United States that are located in 12 states and generally only in busy urban areas.
Customer Satisfaction
To facilitate good customer service, CitiMortgage offers six full days of customer support from Monday to Saturday through phone and email.
According to a primary mortgage origination satisfaction study from J.D. Power in 2019, CitiMortgage placed fourth with a satisfaction score of 859/1000, placing ahead of other major home mortgage lenders like Chase and Bank of America.
The lender also performed well in Consumer Financial Protection Bureau’s records. From 86,213 mortgages originated in 2019, CFPB only received 53 complaints.
However, CitiMortgage received an F rating from Better Business Bureau reviews. This may stem from a government action in 2018 due to a case of fraudulent conduct. While this government action may be a cause for caution, by most accounts, CitiMortgage provides good customer satisfaction.
Strengths Of CitiMortgage
In this section, we’re going to break down the top strengths of CitiMortgage.
Rich Variety Of Home Loan Products
Like most major lenders, CitiMortgage offers a broad selection of home loan products to fulfill different needs. These loans range from conventional mortgages to government-backed loans as well as their proprietary HomeRun mortgage that only requires you to pay as little as 3% down. The only thing that they lack compared to most major lenders is the availability of USDA loans.
Loyalty Rewards For Citibank Customers
If you're a Citibank customer, you’ll get several benefits when getting a mortgage from CitiMortgage. Depending on your Citibank account balance, you can get a credit for closing fees – $250 for those with a loan balance under $50,000. If you have more than $50,000 in your Citibank account, you can get up to 0.625% off your interest rate.
Excellent Availability
While some lenders only offer their products and services to a majority of the country, CitiMortgage serves mortgages in all fifty states, the District of Columbia, and Puerto Rico.
Weaknesses Of CitiMortgage
However, there are some caveats to getting a mortgage with Citi as a lender, which we’ll break down in this section.
Small Number Of Branch Offices
While CitiMortgage originates mortgages for borrowers all across the United States, their physical presence is somewhat limited. At the moment, the company only has 700 branch offices spread across 12 states. Because they’re only available in major urban areas, you might have limited options if you prefer face-to-face interaction when applying for your mortgage in a rural town.
Mortgage Application Process Isn’t Fully Online
Despite the option to apply online, Citibank doesn’t offer a completely online application process. After you’ve filled out the form, you’ll have to talk to a loan officer to fully complete your application. This may pose a problem if you can’t find the time in your schedule or simply prefer a fully-online application process.
Lower Transparency Of Fees
Another issue with comparing Citibank mortgage offers is that you won’t get any information on your closing costs upfront. While most lenders disclose an estimate in their calculations, you’ll need to talk to a loan officer to find out how much you’ll be charged on closing costs.
Closing Thoughts
As a Big Four bank, Citigroup’s mortgage lending arm CitiMortgage offers one of the best selections of loans for its borrowers. With its rewards program for Citibank customers, a mortgage from Citi can be an appealing option. Plus, its best-in-class customer service and high service availability also make it one of the strongest options for mortgages.
However, CitiMortgage isn’t without its weaknesses. The lack of information on their lender fees may make it harder to properly compare offers with another company, and its limited branch availability may turn off those who prefer in-person banking experiences.
If you’re still weighing your options, Wesley Mortgage, LLC is here to help! We’ve compiled reviews from other major mortgage lenders to help you decide which one best suits your needs. If you require a personal mortgage consultation, contact our professional team today to schedule a discussion!