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Finding the right mortgage often feels like finding a needle in a haystack. There are so many options and thousands of lenders, but who has time to check out what each one offers?
LendingTree helps make life easier when you are looking for a mortgage. LendingTree is not a lender – they are a marketplace that brings together borrowers and lenders.
If you wonder what it would be like to have access to multiple loan programs from one application, keep reading our LendingTree Mortgage Review.
>> More: Best Mortgage Lenders
What is LendingTree?
LendingTree is the ‘middleman’ between you and the lender. You complete an application with LendingTree, and they send your information out to their network of thousands of lenders.
Just like when you shop for a flight on Expedia, you will receive offers within seconds. LendingTree does not charge anything for this service. The fees lenders quote you are the fees you would pay if you accept the offer.
From there, you take the ropes. You contact the lender themselves, negotiate, compare loans, or move on with the loan process with the ‘winning lender.’
Is LendingTree Legit?
LendingTree has an A+ rating from the Better Business Bureau and 4.5 stars on Trustpilot. In business since 1997, LendingTree now works with thousands of lenders and has thousands of satisfied customers. With over 1,000 employees, LendingTree posted annual revenue of $1.1 billion in 2019.
Is LendingTree Good for Mortgage Loans?
If you want to comparison shop (everyone should), then yes LendingTree is excellent for mortgage loans. They take the legwork out of getting multiple quotes from different online mortgage lenders. You complete one application and get offers from numerous lenders instantly.
The time you save is worth its weight in gold, not to mention the large selection of lenders LendingTree works with – you may find a better lender than you would have yourself.
LendingTree Mortgage Qualifications
The best part about LendingTree is how easy they make it to qualify for a mortgage loan and immediately begin to shop around for the best rates. Like all loan providers, LendingTree will review your credit score, debt-to-income ratio, and down payment capability.
These factors help set the interest rate on your mortgage and dictate how much money you will actually get loaned.
An excellent credit score helps you get the best loan program and terms, but LendingTree works with borrowers with low credit scores too.
Most lenders prefer a 620-credit score, but LendingTree has lenders offering loans for borrowers with credit scores as low as 500 (government-backed loans) also.
Most LendingTree lenders prefer a maximum 43 percent debt-to-income ratio. Like any lender, though, they may let a higher DTI slip through (up to 50 percent) if you have other qualifying factors. A high credit score or large down payment, for example, offsets a higher DTI.
Ideally, you should have a 20 percent down payment. If you do not, do not worry. LendingTree has options for every single person.
They even work with lenders that allow as little as a 3.5 percent down payment on an FHA loan. The more money you invest, the better the terms you will get, but if you do not have a large down payment, you can still get approved.
LendingTree Mortgage Options
With LendingTree Mortgages, you have a vast selection of mortgages to select from. LendingTree allows you to shop around for conventional, VA, jumbo, FHA, and HELOC loans. Additionally, you can also refinance your current mortgage for a better rate.
Conventional loansare ‘traditional loans.’ They are not backed by the government, but Fannie Mae and Freddie Mac invest in them.
You need ‘good’ credit (usually around 660+), a low debt ratio (36%), and at least a 3 percent down payment (for first-time homebuyers) or 5 percent for subsequent homebuyers.
VA loans are for veterans or current military members. Any military member or veteran with at least 90 days served during wartime or 181 days during peacetime with an honorable discharge is eligible.
VA loans provide 100 percent financing and have the most flexible guidelines, including no minimum credit score or maximum debt ratio requirement. Most lenders, however, stick with a 620-credit score and 43 – 50 percent maximum debt ratio.
>> More:Best VA Mortgage Lenders
Jumbo loans are loans over the conventional loan limit of $510,400. Jumbo loans usually have no investors or government-backing, so lenders have more stringent requirements to prevent default.
Expect higher credit score requirements of 700+, strict debt ratio requirements, and higher down payments (usually 30 percent or more).
If you do not have the DTI or credit score for conventional loans, FHA loans are a great alternative. They have flexible credit score requirements allowing scores as low as 500.
Anyone with a credit score between 500 – 579 must make a 10 percent down payment. Borrowers with credit scores over 580 can put just 3.5 percent down. FHA loans allow 43 percent debt ratios too.
Home Equity Line of Credit (HELOC)
A HELOC is a second mortgage you can get when you own your home. Once you have equity (owe less than the home’s worth), you may borrow against it with a HELOC.
Most lenders allow you to borrow up to 80 percent of the home’s value minus your existing first mortgage balance.
>> More:Best HELOC Lenders
Once you have a mortgage, you can refinance it to get a lower rate, tap into your home’s equity, or change the term.
The process is the same as a purchase mortgage, but make sure refinancing your mortgagemakes sense since you will pay closing costs again.
How a LendingTree Mortgage Works
It all starts with an application. You complete it online, or you can call a representative. Once you complete it, LendingTree pulls your credit and matches you with lenders. They send your information off, and lenders contact you directly.
LendingTree usually sends your information to 4 or 5 qualifying lenders. Once you choose a lender, LendingTree’s job is done.
They receive a commission from the selected lender when you close on your loan. LendingTree does not charge you anything.
How to Apply for a LendingTree Mortgage (Step-by-Step)
The application process is straightforward. You will provide the following information:
- Choose your loan purpose – home purchase, refinance, home equity, or reverse mortgage
- Select the property type – single-family, townhome, condo, multi-family, or manufactured home
- Choose ownership type – primary residence, second home, or rental property
- Enter the purchase price or loan amount if you are refinancing
- Enter your down payment amount
- Input your annual income and your employment status
- Estimate your credit score.
- Enter your Birthdate and Social Security number (optional)
LendingTree pulls your credit with your authorization and sends your information to lenders within seconds. They provide you with immediate results from 4 -5 lenders. You may also receive more emails or phone calls from other lenders.
LendingTree Mortgages Pros and Cons
- LendingTree makes mortgage comparison shopping simple
- You can view customer reviews of each lender on LendingTree’s site
- LendingTree is free to borrowers
- You may secure better rates from LendingTree than if you shopped around yourself
- You must provide a lot of personal information
- You may get a lot of phone calls or emails long after you applied
What Credit Score Do You Need to Get a Loan from LendingTree?
Ideally, LendingTree lenders prefer a 620-credit score or higher. It is not required, though, as specific government programs, such as the FHA and VA loans allow lower credit scores. Look at the big picture when you apply for a mortgage.
If you have a low credit score, how can you offset it? Do you have a large down payment or a low debt-to-income ratio? If you can show an overall ‘good picture’, many LendingTree lenders allow a lower credit score.
Will LendingTree Hurt My Credit?
LendingTree pulls your credit, but it is a ‘soft credit pull.’ This does not affect your credit score. LendingTree pulls your credit to match you with lenders. Since they are not issuing you new credit, it does not count as a credit report inquiry.
If you are matched with a lender or take the process further with any lender, they will likely pull your credit, which may lower your credit score slightly.
Each inquiry costs your credit score 5 points, but any inquiries done within 45 days for the same type of loan (mortgage) counts as one inquiry.
Does LendingTree Verify Income?
LendingTree simply matches you with lenders based on the information you provide. They do not verify any of your information – that’s the lender’s job.
Once you choose a lender, they will ask for proof of your income. Typically, lenders need:
- Paystubs for the last 30 days
- W-2s for the last 2 years
- Tax returns for the last 2 years (if you are self-employed or work on commission)
Is LendingTree Safe?
LendingTree does everything it can to keep your information safe. They use 128-bit encryption and high-quality firewalls to prevent the unauthorized transition of your private information. LendingTree also logs you out after a few minutes of inactivity on your account.
How Does Lending Tree Make Money?
LendingTree makes money by referring you to lenders. The lenders pay LendingTree a commission for every loan closed that LendingTree referred. Think of it as a referral fee. LendingTree does the advertising to bring in more customers for lenders.
Bottom Line: LendingTree Mortgage Review
If you want one-stop mortgage shopping, look no further than LendingTree. They have been around for more than 20 years and have thousands of satisfied clients. All borrowers should comparison shop before settling on a mortgage since it is the largest investment you’ll make in your lifetime.
LendingTree makes it easier for you by doing the comparison shopping for you. Take advantage of its many benefits and find the most affordable loan for your home buying or refinancing needs.