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U.S. Bank Mortgages: BiggerPockets Review
May 27, 2020
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U.S. Bank was once highly local: When it first opened in 1863, it was the First National Bank of Cincinnati Business. Quickly the bank expanded across the country—and eventually, changed its name to the national moniker we know today. Currently, it's the fifth-largest retail bank in the U.S., with $475 billion in assets. U.S. Bank offers consumer and commercial loans, deposit accounts, credit cards, mortgages, investment management, trust, and brokerage services.
While U.S Bank is the largest bank outside of the big four banks—Wells Fargo, JPMorgan Chase, Bank of America and Citibank—the difference between the big four and U.S. Bank is considerable. It's about one-quarter the size of the next-largest bank. This significant size difference impacts U.S. Banks' ability to compete with the big four, resulting in a limited geographic presence. Despite the name, the bank doesn’t operate all across the U.S. Instead, it focuses on 25 states in the West and Midwest. U.S. Bank has a network of over 3,200 branches.
While U.S Bank is the largest bank outside of the big four banks—Wells Fargo, JPMorgan Chase, Bank of America and Citibank—the difference between the big four and U.S. Bank is considerable. It's about one-quarter the size of the next-largest bank. This significant size difference impacts U.S. Banks' ability to compete with the big four, resulting in a limited geographic presence. Despite the name, the bank doesn’t operate all across the U.S. Instead, it focuses on 25 states in the West and Midwest. U.S. Bank has a network of over 3,200 branches.
Quick facts
- U.S. Bank is the fifth-largest bank in the U.S. It's a full-service banking institution, not just a mortgage lender, offering checking and saving accounts, credit cards, and investment accounts.
- The bank offers fixed- and adjustable-rate mortgages, as well as government-insured Federal Housing Authority (FHA) and Veterans Affairs (VA) loans. They will also lend for investment properties and second homes.
- Rates are higher than average, but they do business in all 50 states, despite having locations in just half the country.
- U.S Bank’s average charges for an origination fee is nearly $1,400. The fee, based on an average loan size of nearly $300,000, amounts to 0.50 percent in lender fees.
MORTGAGE RATES
U.S Bank is one of the broadest lenders available, with home loans available for all 50 states. They offer online prequalification, which is not provided by many lenders, who tend to deliver this either in person or via phone.
Mortgage rates for various U.S Bank loan products are listed on its website; however, these are national rates based on general assumptions. The customized rate will be based on personal credit score and property details. Generally, they tend to offer slightly higher-than-average rates—for instance, their current average 30-year mortgage rate is 3.625 percent (as of May 2020), compared to a 3.3 percent national average. Its ARM products and FHA rates tend to stay in line with national averages.
PROS
- U.S. Bank has a sizable presence—especially compared to regional and local banks—with 3,200 traditional branches.
- U.S. Bank provides full banking services beyond mortgages, including retirement accounts, credit cards, and boat and RV loans.
- It offers online prequalification, which is a service not provided by many lenders.
- The bank will do a home equity line of credit on an investment property, which puts U.S. Bank on a short-list of lenders that will.
CONS
- Despite doing business in all 50 states, U.S. Bank has limited physical locations, with branches in just 25 states—mostly in the West.
- Interest rates are on the high end of the national averages for all major mortgage products.
- Requirements tend to be fairly rigid, as U.S. Bank requires a lot of information.
Mortgage products
CONVENTIONAL MORTGAGES
U.S. Bank offers conventional, fixed-rate mortgages and adjustable-rate mortgages (ARM) with an initial (three-, five-, or 10-year) interest rate period. ARMs are best used for those planning to flip a property or move in after a few years. This type of loan requires a minimum credit score of 740 or better.
U.S. Bank offers conventional, fixed-rate mortgages and adjustable-rate mortgages (ARM) with an initial (three-, five-, or 10-year) interest rate period. ARMs are best used for those planning to flip a property or move in after a few years. This type of loan requires a minimum credit score of 740 or better.
FHA LOANS
U.S. Bank's FHA loans offer flexible lending requirements, albeit with higher interest rates and monthly payments. Or choose VA loans, which require little or no down payment and no mortgage insurance.
JUMBO LOANS
U.S. Bank also offers jumbo loans and refinancing, including traditional and cash-out.
CONSTRUCTION LOANS
Beyond all the typical loans you’ll find at a major bank, U.S. Bank also offers construction loans, which are used when building a new home. Additionally, U.S. Bank offers investment property loans, which are mortgages on investment properties and second homes, such as one- to four-unit properties.
U.S. Bank and real estate investors
U.S. Bank can serve as a one-stop-shop for investors, offering banking, lending and investing products. The bank also offers HELOCs for investment properties—one of the few banks that does. The bank also handles mortgages on rental properties as well as cash-out refinancing.
On the downside, dealing with U.S. Bank can be a long process, requiring copious amounts of information. “They required [three] times as much information as a local bank,” notes Oklahoma’s Seth Greenfield. There was “nothing outlandish just a lot more of a hassle,” Greenfield added. As noted by California investor Nicholas Lohr, working with U.S. Bank can be a long and frustrating process.
The application process
When applying for a mortgage at U.S. Bank, you can call customer service, use an online form to request a call-back from a representative, or meet with a mortgage loan officer in-person at one of the local branches. The process can be streamlined by initiating the process and applying for prequalification via their website.
Much like any mortgage lender, a credit score of a minimum of 620 is generally required, as well as two years of employment. A jumbo loan is the only exception—it demands a 700 credit score or higher and at least 20 percent down payment.
The necessary information required by U.S. Bank includes:
- Borrowers' names and addresses for two years.
- Overview of financial history, including debts and income.
- Employment verification and income history, such as pay stubs and tax returns for two years.
- Two months of bank statements along with any investment account statements that will be used towards a down payment.
- For investment properties, documentation of address(s), current value, mortgage lender name and address, and data on loan type and history.
U.S. Bank not right for you? Read more mortgage lender reviews.
Learn More on BiggerPockets:
- The Ultimate Beginner's Guide to Home Loans
- What Newbies Should Know About Financing Investment Properties (Versus Homes)
- The Comprehensive Guide for Financing Your Very First Real Estate Deal
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