Mr. Cooper Bad Credit Mortgage Reviews

Mr. Cooper is an extended arm of the Nationstar Mortgage – one of the largest non-bank lenders. Founded in 1994 in Dallas, Texas, this company has consistently been one of the preferred choices for borrowers in terms of a mortgage with bad credit.

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    About Mr. Cooper

    The company is known to offer transaction-based real estate services, in addition to mortgage servicing and loan origination. Mr. Cooper mortgage products are competitive, and borrowers with low credit scores can readily benefit from these loans.

    While they don’t offer any banking services, you can choose from

    • FHA loans
    • ARMs
    • VA loans
    • IRRRL loans
    • Jumbo loans
    • conventional loans

    The low minimum credit score required for an FHA loan is 580 and 620 for most of the other loan types available. Down payments start as low as 3.50% but for most mortgages, you can anticipate rates between 10%-20%.

    The company is licensed to offer loans in all states, except Hawaii and prospective borrowers with any questions or inquiries can interface with a US-based customer service team.

    Mr. Cooper Financial Terms in a Glimpse

    Minimum Credit Score
    580-620
    Term Length
    10-30 Years
    BBB Rating
    B+
    Loan Amounts
    Up to $2 Million
    Minimum Down Payment:
    3.50%


    Mr. Cooper has lived up to its brand tagline “changing the face of home loans”. Not only do they have the greatest selection of mortgage with bad credit loans (both conventional and specialty), they also accept low credit scores and charge low-interest rates.

    Between a straightforward website, mobile apps for Android and iOS, zero-fees for online payments, US-based customer service, and ability to offer mortgages in 49 states, Mr. Cooper has everything covered.

    Apply Online

    You can apply for a Mr. Cooper mortgage online, however, to finalize any deal, you’ll have to speak with a mortgage professional to conclude the process. The website is exceptionally resource-rich, and a first-time buyer can gain a substantial amount of mortgage wisdom just by visiting and reviewing the site itself. For instance, you can check the Loan Types on their website (with Pros and Cons) before committing to a type and offer.

    Home Loans

    Mr. Cooper offers a varied selection of mortgages to meet the needs of a first-time buyer or someone with a low credit score. You can find most of the details related to prices and rates on their website. For FHA home loans, Mr. Cooper accepts credit scores as low as 580. You will need a minimum credit score of 620 for accessing some conventional loans. Down payment rates range anything between 3.50% to 20.00% (except for VA Loans which can start as low as 0.00%).

    Conventional Loans

    This loan requires low down payments (minimum 5% + mortgage insurance) and has flexible as well as adjustable rate options. However, these conventional loans are not insured by the Federal Government. The repayment terms are 15 and 30-year options. Mr. Cooper’s maximum loan amount for conventional loans is $679,650.

    Fixed-Rate Mortgage

    The rate of interest for this type of loan does not change over the life of the loan. You can accept a repayment term of 30 years, and the monthly payment will be fixed for this entire duration. However, this type of loan might incur higher rates than comparable adjustable rate mortgages depending on interest rates set by the central bank and other factors.

    Adjustable-Rate Mortgage

    Unlike a fixed-rate loan, your interest rates for this type of mortgage will change as per the National Rate Index (within certain limits). You can choose from a 3-year lock-in, 5-year or a 10-year lock-in. If you’re in the process of repairing your credit score, this can be a good option.

    FHA Loan (Federal Housing Administration)

    Low-credit score, moderate to low income, limited funds for a down payment – if these are your problems, FHA is likely the best mortgage solution for you. It is a Government-backed loan with low down payment rates (minimum 3.50%) and flexible credit requirements. If you’re struggling to get a conventional loan, FHA might save the day. However, it does incur an upfront and monthly mortgage insurance cost.

    FHA Streamline Loan

    This is for borrowers who already have an FHA loan running. It is a refinancing solution in case an existing borrower wants to refinance the outstanding mortgage balance with a lower monthly payment. Mr. Cooper offers the quickest turnaround in Streamline Loans, but refinancing does involve a fee.

    Veterans Affairs (VA) Loan

    VA Loans are approved by the Department of Veterans Affairs. Any borrower who is a current or past member of the US military or spouse is eligible for this loan type. It does require a lot of documentation, but it sure has the lowest down payment rates (and even 0.00% in some cases).

    VA IRRRL Loan

    An Interest Rate Reduction Refinance Loan (IRRRL) is a refinancing loan for borrowers who already have an outstanding VA Loan. Mr. Cooper doesn’t require you to provide a credit score, and you may not be asked to pay anything from your pocket. If you are migrating from a VA ARM loan, you might see a drop in the interest rate. If you do want an IRRRL loan, make sure you have a funding fee ready.

    Jumbo Loans

    Any loan that exceeds the limits of a conventional loan ($484,350 - $726,525) is a jumbo loan. You can buy or refinance high-value properties with this loan while selecting either a fixed or an adjustable mortgage rate.

    How Mr. Cooper Works

    Getting started with a Mr. Cooper mortgage means visiting their official website and browsing through the loan types before filling up a form. The other option is to call their customer service line to speak to a loan officer. Either way, you will need to connect with someone via phone to proceed. Sadly, Mr. Cooper doesn’t offer online-only applications.

    It is licensed to offer loans throughout the US (except Hawaii) but doesn’t have any physical branch offices. Once you submit the contact form, a loan officer will contact you to discuss the available options. They will also guide you through the pre-qualification and pre-approval processes. You can check the status of your application in real-time and after all the documents are validated, your mortgage will be processed. You’ll be duly notified about how much you need to pay on closing.

    Pre-Qualification & Approval -To clear this process, you will need to provide your tax history, credit report, employment history, social security number (SSN), self-employment documents, and any additional proof.

    The Application process – Fill the URLA (1003) with full disclosure. Once all necessary paperwork is processed, your application is forwarded to an underwriter.

    Underwriting and Closure – This is a fairly straightforward process. All you need to do is sign the documents and purchase insurance. Pay the upfront fee as agreed and your application is successfully completed.

    Mr. Cooper Fees & Terms

    While there is no direct mention on Mr. Cooper’s official website, down payment rates start as low as 3.50% for FHA loans. In certain cases, VA Loans will encounter no down payment. The repayment terms offered will vary between 15 and 30-year. Moreover, there might be some additional expenses (mortgage insurance, processing fee, origination fee) incurred, but it too depends on the loan types.

    For a successful application, you will need the following documents handy:

    • Social Security Number        
    • Employment Proof
    • Income Proof
    • Tax Documentation
    • Address Proof
    • Bank Statement
    • Credit Information
    • Monthly Expense Statement
    • Self-employment documents
    • Purchase Agreement (in selective cases)

    Mr. Cooper Customer Service

    You can contact Mr. Cooper’s customer service team via phone, email, and fax. If you are a new customer, just fill in the contact form on the website and a loan officer will call you. If you are an existing customer, you can access the free customer support Monday to Thursday between 7:00 AM to– 8:00 PM CST, Friday from 7:00 AM – 7:00 PM, and Saturday from 8:00 AM – 12:00 PM.

    If you are comfortable finding answers on your own, Mr. Cooper features an exceptionally resourceful website and some good tools like a mortgage calculator that can help you evaluate your potential monthly mortgage costs and more.

    Mr. Cooper Pros and Cons

    Pros

    • Accepts low credit scores – Mr. Cooper accepts scores as low as 580 and also consider alternative credit data for FHA loans
    • Real-Time Tracking – Track the application status on their website or through the mobile app
    • Nationwide Availability – Mr. Cooper is licensed in all states except Hawaii
    • Various Mortgage Options – Choose from conventional or specialty government-backed loans
    • Excellent Customer Service – Benefit from access to US-based customer support Monday through Saturday
    • Excellent Resources- Take advantage of a robust and resourceful website with thorough information, calculators, guides, and more
    • Competitive Rates – Select from loans featuring low interest and down payment rates

    Cons

    • Missing Branch Offices – Mr. Cooper has no physical offices you can visit
    • No Online Application Approval– Applicants are required to speak with a loan officer before mortgage approval

    Mr. Cooper Pros and Cons

    Pros

    • Accepts low credit scores – Mr. Cooper accepts scores as low as 580 and also consider alternative credit data for FHA loans
    • Real-Time Tracking – Track the application status on their website or through the mobile app
    • Nationwide Availability – Mr. Cooper is licensed in all states except Hawaii
    • Various Mortgage Options – Choose from conventional or specialty government-backed loans
    • Excellent Customer Service – Benefit from access to US-based customer support Monday through Saturday
    • Excellent Resources- Take advantage of a robust and resourceful website with thorough information, calculators, guides, and more
    • Competitive Rates – Select from loans featuring low interest and down payment rates

    Con's

    • Missing Branch Offices – Mr. Cooper has no physical offices you can visit
    • No Online Application Approval– Applicants are required to speak with a loan officer before mortgage approval

    Final Thoughts About Mr. Cooper

    With their flexible credit acceptance and low interest rates, Mr. Cooper is undoubtedly one of the biggest players in the bad credit mortgage market today. A great choice for first-time buyers and for those with low credit scores, Mr. Cooper features access to multiple loan types while letting you choose between adjustable and fixed rates.

    Although it misses out on a live chat and online application feature, the website and customer service are exceptionally well-maintained and helpful resources like guides and calculators give an extra benefit for borrowers still doing their homework. Overall, Mr. Cooper is definitely an option worth exploring thanks to its friendly service and excellent mortgage choices.