WaterMark Home Loans Review: Flexible Financial Terms For Different Loan Types

If you're looking for a wide selection of loan options for your future home, WaterMark Home Loans is a solid choice. This company is known for offering many flexible loan types, with competitive mortgage rates and refinance options – even at lower credit scores.

Curious to find out how this company compares to other mortgage companies? Read our review to learn more information about WaterMark Home Loans and get advice about its home loan application process!

What To Look For In Mortgage Lenders

While everyone should always be on the lookout for low rates, there are other things that you should consider when applying for a loan. Before getting into our review of WaterMark, here are five considerations when picking a lending business.

Loan Types

Different companies will offer different loan types, each with its own credit rating or financial requirements. Other loan types will have added qualifications, such as USDA, VA, and FHA loans.

Aside from conventional loans, some lenders may offer to help you refinance an existing loan. You can also take out interest-only loans and loans for renovation. Find out which is suited to your home needs and budget before making a decision.

Application

You should ask your mortgage broker how long the average mortgage application process will take once you've submitted all the required documents. In the worst cases, applications can take weeks or even months.

Find out if your chosen companies have an online application process. This service allows you to submit documents without going to a brick-and-mortar location and can significantly expedite the process.

Interest Rate

The more risk there is in lending someone money, the higher the interest rates they'll be charged. Here are some factors that a lender may review before fixing your interest:

• Credit Score: The higher your credit score, the lower the rates you'll be offered.
• Loan-to-Value Ratio (LTV): The lower the percentage of your loan amount compared to the value of the property, the lower your rate will be.
• Credit History: A well-established credit history reassures lenders that a borrower is capable of paying on time, so they're more likely to offer lower interest for mortgages.
• Employment: Your type of employment can affect your income and whether you can make timely monthly payments, so it's typically a factor in computing your mortgage interest rate.
• Loan Term: A longer loan term will have lower monthly payments, but this could lead to a higher offered rate because the lender will have to assume risks for a longer period.

These are only a few of the considerations that a company reviews before giving you initial interest rates for mortgages. Ask a real estate agent for more information about how to improve your risk assessment and the rates you may be offered.

Remember: rates change frequently, so check our handy table to find the lowest possible rate:

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If your rates are still too high, ask your chosen lenders if they will let you buy discount points. Each discount point is typically worth 1% of the value of the mortgage and lowers your interest by 0.25%. Compare the impact of a lower rate over the term of a loan versus the savings of buying discount points immediately.

Lastly, consider the effect of rate locks on interest. A rate lock helps you secure a fixed interest rate for the period between the loan offer and closing. This rate will remain the same as long as you close within the specified period.

Check the rules on expiry and penalties. If the lock expires and you weren't able to close on your mortgage, your lender might ask you to pay for an extension of the lock – even if you were not the cause of the delay in closing! This is an expense you'll need to prepare for before applying with a company.

Customer Service

Mortgages can last for years – during this time, you’ll likely need help from customer service. You can learn more about a lender’s customer satisfaction performance by reading online reviews or researching how its team handles inquiries and complaints.

Check if the company provides multiple ways to contact its customer support team, such as emailing or calling. The more ways there are to contact your lender, the easier it will be to get help when you need it.

Additional Fees

Mortgages have other costs that can put a dent in your finances, such as application fees, appraisal costs, and underwriting costs. Find out how many of these fees will be charged by your lenders and negotiate to have them lowered or completely waived.

WaterMark Home Loans Mortgage Review

Founded in 2006, WaterMark Home Loans is an Irvine, CA mortgage lender that offers refinance loans and home purchase financing. It presently has a license to operate in 39 states and Washington, D.C. This CA direct-to-consumer mortgage lender funded over $1.2 billion in home loans in 2020.

WaterMark Home Loan Types and Services

WaterMark Home Loans Mortgage offers the following home loan options:

Fixed-Rate Conventional Loans

Because a fixed-rate loan’s interest is controlled by a rate lock for the lifetime of the mortgage, your monthly payment will remain the same, making it easier to set your budget. This is the most popular kind of mortgage because it's very stable and predictable. 

FHA (Federal Housing Administration) Loans

Loans insured by the FHA have more flexible requirements such as lower minimum credit scores, but they tend to charge higher rates.

USDA Loans

The US Department of Agriculture offers this type of loan to applicants that meet its geographic and income eligibility criteria. We highly recommend this loan type for those who are buying rural properties in USDA-eligible areas as you can purchase your home with zero down payment.

VA Loan

These loans are guaranteed by the Department of Veteran Affairs, offering qualified applicants the option of a mortgage with zero down payment. VA loans have an easier application process but stricter requirements – you must be an active member or retired veteran of the U.S. Armed Forces, Reserves, National Guard, or a military spouse.

Adjustable-Rate Mortgages (ARMs)

ARMs are mortgage loans that have lower rates for an initial set period, ranging from one to ten years, after which the rate is adjusted based on market conditions. There is also a fixed maximum rate that can be charged in an ARM.

Interest-Only Loans

This loan type allows you to pay interest-only installments in the first few months of your mortgage, allowing for greater financial flexibility.

Jumbo Loans

Jumbo loans can help you finance the purchase of luxury homes or properties located in highly-competitive real estate markets. WaterMark offers jumbo loans worth up to $10 million.

Piggyback (80-10-10) Loans

A piggyback loan is a way of buying a house with two simultaneous mortgages. The first mortgage will cover 80% of the price of your house, while the second mortgage will pay for 10% of the price. The rest will be handled through your down payment, hence the name "80-10-10 loan".

This form of loan helps you avoid taking out a jumbo loan to pay for a high-value property and keeps you from spending on private mortgage insurance.

Reverse Mortgage Loans For Seniors

Also known as a Home Equity Conversion Mortgage (HECM), this allows homeowners who are 62 and older to convert part of their home equity into cash. While this gives immediate money to pay off debts or supplement income, you run the risk of giving up your home to pay off the loan.

Refinance

Borrowers who already have existing home loans can apply for a cash-out or rate-and-term refinance with WaterMark. If you choose to refinance, you may qualify for a lower rate or a better term, but you'll have to pay the closing costs on your new loan.

Application Process

WaterMark has a basic online portal where you can check its contact information or fill out an online form to start your application. Here's how the process works.

Call WaterMark Directly Or Apply Online

To start your application, you have two options: you can call the lender to talk to a loan officer, or you can fill out the contact form on the site.

Get Information About Rates and Fees

Once you send in an inquiry, you'll get free quotes that include your potential interest. If you find the terms favorable, you can move on to the digital loan application.

Send Your Application

The online application form requires personal information, such as your zip code, job, and desired loan type. The online portal allows you to check your loan status any time, electronically sign and submit documents, and link your financial accounts through your payroll or bank credentials. You can also message a loan officer to collaborate and get help in real-time.

Wait For Your Loan To Be Approved

Sign and send any final documents that your loan officer might request. Once you've submitted all the requirements, all you have to do is wait for your application to be approved. When you're done, you can officially close on your house.

Mortgage Rates And Fees

Before you finalize your application, compare lenders' fees and the mortgage rates being offered. Some loan officers will charge higher fees upfront but offer a lower rate in exchange. Your chosen mortgage lender may also allow you to buy discount points to reduce your mortgage rates.

Because Watermark Home Loans doesn't post information about its rates and fees online, it can be difficult to see if its offers will fit into your budget. However, it claims to offer zero-cost closing and zero application fee options. Contact a WaterMark loan officer to find out if you qualify for these choices.

Customer Service

WaterMark Home Loans has an average score of 3.97 out of 5 stars from a total of 33 customer reviews with the Better Business Bureau. This gives them a review average of A+ with the BBB.

Customer reviews highly recommend WaterMark, with many saying they had a positive experience with a very responsive team. Customers also said that they were offered competitive rates by their loan officer.

Will You Be Eligible For Watermark Home Loans?

Three factors can affect your loan process: your debt-to-income ratio, the minimum down payment you make, and your credit score. Here's how WaterMark applies these criteria.

Debt-To-Income Ratio (DTI)

A mortgage banker will review your DTI, a figure that represents how much debt you have versus your income. This signals whether you’re capable of making the monthly payments on your mortgage loans. 

To compute your DTI:

1. Add your monthly debt obligations, such as bills for credit cards, car payments, and student loans. 
2. Add the potential monthly cost of your mortgage. 
3. Divide the sum by your monthly pre-tax income. 
4. Multiply this number by 100 to get your DTI.

Ideally, lenders want borrowers who have a DTI no higher than 36%. Lenders are sometimes willing to allow higher DTI percentages for FHA, VA, and USDA loans.

Minimum Down Payment

A second consideration is the minimum down that applicants can pay. WaterMark home loans require a minimum down of 3% for most of its loan types. If you meet the requirements of the VA or USDA, you can get a zero-down loan option.

For applicants in high-value locations, WaterMark offers a 5% minimum down option for loans up to $1.5 million. For loans up to $3 million, 10% down is required.

Credit Score

Usually, lenders offer the best rates to applicants that have a credit score of 740 or above. WaterMark, however, will still grant loans to applicants who have a minimum score of 620, making them a solid choice for those whose financial situation may be keeping them from becoming homeowners.

Pros

• WaterMark offers zero application fees and zero-closing costs options.
• It offers different types of mortgage loans not available from other lenders, such as interest-only loans and piggyback loans.
• WaterMark offers mortgages at relatively low credit scores, making it easier for future homeowners to get approved.

Cons

• WaterMark Home Loans doesn't offer home equity loans or HELOCs (home equity lines of credit).
• It doesn't provide loan rates and fees online, so you'll have to contact a loan officer for more information.

The Bottom Line

WaterMark offers a wide array of loan types that are suited to many unique homeowner needs, such as refinance loans and piggyback loans. Because they also lend to applicants with lower minimum credit scores, WaterMark is a good choice for those who need flexible financial terms. However, they do not offer home equity loans or HELOCs – if this is your desired loan type, you'll have to go elsewhere.

If you're uncertain if WaterMark is the company for you, contact Wesley Mortgage, LLC. We advise each client based on their unique financial situation – with our help, you can find the right loan type for your budget and needs!

If you decide that you don't want to get a loan from WaterMark, you can read our different lender reviews to make the best choice for your future home.