Mutual of Omaha Mortgage Review

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Mutual of Omaha boasts more than a century of service and stability in the insurance industry, but its banking business started much more recently, in 2007.

Its banking subsidiaries have grown in their short history, and recently, CIT Bank acquired Mutual of Omaha Bank for $1 billion.

This deal does not include Mutual of Omaha Mortgage which will remain part of the Omaha, Neb.-based insurance company.

Should you partner with Mutual of Omaha Mortgage or a different lender for your mortgage? Let’s take a closer look to find out.

Mutual of Omaha Mortgage

Mutual of Omaha writes mortgages through its subsidiary Synergy One Lending.  Acquiring Synergy made Mutual of Omaha a full-service mortgage loan provider almost overnight.

Though now a subsidiary of Mutual of Omaha, Synergy One Lending remains intact. The lender changed its name to Mutual of Omaha Mortgage.

Since Synergy One is owned by Mutual of Omaha and does business as Mutual of Omaha Mortgage, I’ll keep things simple and use the same name in this review.

Mortgage Loan Options

Mutual of Omaha Mortgage specializes in VA lending but also provides conventional mortgages and FHA-subsidized loans.

Mutual of Omaha other Mortgage Products Include:

  • Fixed Conventional Loans: The government does not back conventional loans, which means you’ll do best with an excellent credit score and a 20 percent down payment. You can lock in a fixed interest rate for the life of your loan, which can be either 15 or 30 years with MofO. If you can qualify, you can borrow more quickly and with no government red tape.
  • Adjustable Rate Mortgage (ARM): An adjustable interest rate works well as a temporary conventional loan. After the loans’ low introductory rate expires (after 5, 7, or 10 years), your rate will fluctuate each year with the market. If you plan to sell or refinance within the introductory period, you can save a lot in interest.
  • Federal Housing Authority (FHA): These loans work a lot like VA loans for non-veterans, but they normally require at least 3.5 percent down, and they do require buyers to pay PMI premiums throughout the life of the loan.
  • USDA Loans: The U.S. Department of Agriculture helps rural homebuyers by backing these low-interest loans, which do not always require a down payment. Your income, compared to the average income in your region, will help determine how much you could benefit. USDA loans do require PMI.
  • Jumbo Loans: Designed specifically for high value markets, a Jumbo Loan also has more strict requirements for borrowers.
  • Refinancing: Mutual of Omaha Mortgage has a wide selection of refinancing tools, including conventional, subsidized, cash-out, and home equity loans.

Mutual of Omaha VA Loans

Many banks — including most large, national mortgage lenders — have the authority to lend mortgages through the VA. And, the federal government secures and regulates VA loans no matter which bank you choose.

So why should you consider Mutual of Omaha for your VA loan?

Commitment
Mutual of Omaha Mortgage has made a commitment to becoming a leading provider of VA mortgages. This specific focus on veterans can help the process of getting approval to go more smoothly.

Securing Eligibility
To qualify for a VA mortgage, veterans must get a Certificate of Eligibility from the government. Mutual of Omaha’s customer service reps can help guide you through this process. Getting your certificate is just the first step; you’ll still need to qualify for the actual mortgage, too.

Jumbo VA Loans
In most counties, VA loans have a $548,250 cap on borrowing in 2021. Most people can buy plenty of house in their market within this borrowing limit; however, Mutual of Omaha’s Jumbo VA loans can exceed this cap in some markets if necessary.

VA Refinancing
Not all VA-authorized lenders have refinancing options available. Mutual of Omaha can help veterans refinance existing VA loans into new VA loans through the Interest Rate Reduction Refinancing Loan (IRRRL).

Mutual of Omaha Mortgage Rates & Fees

If you’re a qualifying veteran, the Department of Veterans Affairs can back your mortgage, giving you the following ways to save on your loan:

  • No Down Payment: VA loans don’t require a down payment, but you can still put money down to get ahead on your loan.
  • No PMI: Other mortgage loans will require you to pay private mortgage insurance (PMI) premiums unless you put 20 percent down. VA loans avoid this requirement because the government backs your loan.
  • Lower Credit Requirements: Veterans with a 620 credit score and a debt-to-income ratio as high as 60 percent can still qualify for a no-down-payment mortgage.

The VA provides these benefits through authorized lenders such as Mutual of Omaha so veterans can more easily buy safe and affordable homes.

This lending program lowers the bar for the borrower by lowering the risk of loss for your lender, opening the door for better borrowing terms.

But if you do have money for a down payment or if you do have great credit, you can save even more money on your loan.

A down payment, for example, can help you save both in interest charged over time and by lowering the VA’s required funding fee.

VA Loan Funding Fee

VA loans don’t require private mortgage insurance or down payments, but the program requires a funding fee based on the amount borrowed.

Fees vary based on the amount of your down payment and on whether you’ve used VA borrowing benefits before.

0% to 4.99 % down 5% to 9.99% down 10% or more down
1st Mortgage Fee 2.3% of loan 1.65% of loan 1.4% of loan
Subsequent Fees 3.6% of loan 1.65% of loan 1.4% of loan

Some borrowers can have this funding fee waived: Purple Heart recipients, veterans who were disabled in the line of duty, or spouses of veterans killed in action for example.

Understandably, this fee seems expensive to many borrowers. For instance, a no-down-payment loan of $200,000 would require $4,600 in funding fees.

But compared to the cost of monthly PMI premiums over the long term of a mortgage, the fee will seem more affordable.

Some borrowers fold this fee into the balance of their loan. Use this method only if you have to, though, because you’ll be adding to your debt.

Interest Rates

The big cost with any mortgage comes from its interest rate. Your lender will spread your interest charges across the life of your loan; homebuyers don’t always know how much, in dollar figures, they will pay in interest.

It’s not unusual to pay $100,000 or more in interest over the life of a 30-year loan. Getting the best interest rate helps lower this amount.

Rates change every day. They fluctuate with the broader economy. Your individualized rate will depend in part on your credit score, your down payment, and your debt-to-income ratio. More qualified buyers get the best rates.

Mutual of Omaha Mortgage’s rates are competitive, both for VA and FHA loans as well as conventional options.

It’s up to you, the homebuyer, to compare interest rates from several lenders before finalizing your loan. Even shaving a quarter-point from your interest rate will lead to real savings.

Closing Costs

Along with ongoing interest payments and the VA funding fee, you’ll also have to pay closing costs. Closing costs include a wide variety of charges and fees, most of which do not come from your lender.

The VA allows lenders to charge up to 1 percent of the loan’s value as an origination fee. Your fee should not exceed 1 percent with any VA lender, including MofO.

Along with this lender’s fee, closing costs usually include:

  • Appraisal Fee: Lenders such as Mutual of Omaha want to make sure the home you’re buying is worth the money they’re lending. An appraisal, which costs about $500, confirms the home’s value.
  • Attorney’s Fees: You’ll need a lawyer to help close your real estate transaction. Lawyers research deeds and titles and make sure the home is properly listed as your property.
  • Insurance and Taxes: Determining how to pro-rate the current property tax bill and setting up an escrow account to fund future years’ tax and homeowners insurance premiums often requires some money up front.
  • Home Inspection: You’ll pay this before closing, and it should be money well spent. For a few hundred dollars, you can find out whether the home you’re buying has serious structural or systemic problems.

In total, closing costs — not including the VA funding fee — can add $4,000 to $7,000 to your home’s price. Some buyers can negotiate with the seller to divide these extra costs. It never hurts to ask. But with a VA loan, a seller can pay only 4 percent of closing costs.

Other buyers fold closing costs into the mortgage loan itself. Do this if you have to, but remember you’ll be adding to your monthly payments and your overall debt.

Application Process

To apply for any Mutual of Omaha mortgage, call a loan officer on the phone or fill out a brief questionnaire on the lender’s site, which will allow a loan officer to contact you. Remember, the callback will come from Synergy One Lending doing business as Mutual of Omaha Mortgage.

MofO can get you prequalified quickly. The lender’s new app can guide you through the process in about 10 minutes.

This initial step of prequalification can reveal your home price range if you haven’t already determined it. This step can also help you find your ideal loan type — subsidized, conventional, adjustable rate, or fixed.

Prequalification uses your credit score and some details about your financial life, but your loan’s rate and terms will not be finalized until MofO’s underwriting process which takes place through Synergy One Lending.

Depending on your home loan type, you may need to share bank records for the past few months, verify employment, and share tax forms.

Finalizing a loan usually takes a couple of weeks, so be sure to provide financial details as quickly as possible.

Promotions, Bonuses, Coupons

Mutual of Omaha allows loan applicants to buy discount points to lower their interest rates. Typically, a point costs 1 percent of your loan’s value and can shave 0.25 percent from your interest rate.

Since interest is the most significant expense most borrowers will pay, discount points appeal to a lot of home shoppers when they can afford this extra up-front money.

If your budget’s too tight to part with an extra 1 or 2 percent of your loan’s value up front, don’t make discount points a priority. It would take some time — usually three to seven years — for your discount points to pay off in interest savings anyway.

Some employers have partnered with Mutual of Omaha Mortgage to offer a $1,000 discount on closing costs as an employee benefit. Check with your employer to see if it participates (or would be interested in participating).

Security Features

As an insurer, Mutual of Omaha prides itself on more than a century of trust. Independent insurance rating agencies support this claim with solid health ratings year after year.

MofO hopes this tradition of insurance stability will carry over into its banking business, but as a consumer, you get to decide how much credence to give a well-respected name.

Mutual of Omaha’s short history in banking and mortgage lending has been free of the security breaches and unethical practices that have plagued some other leading banks since 2007. The company usually has an A+ rating with the Better Business Bureau.

There’s no reason to think your information would not be safe with this lender.

But you have the right to ask your loan officer specific questions about your account and personal data security. It’s up to you to decide who to trust with your important data.

Mutual of Omaha Customer Service

Mutual of Omaha prides itself on creating personal relationships with its clients.

Since you’d most likely be dealing with your loan officer over the phone, having a dedicated contact person makes the process run more smoothly.

You can also chat online or, if you live on the West Coast, stop by a Synergy One Lending office to discuss your loan.

For most customers, it works like this:

  1. You initiate contact online or by calling Synergy One’s toll-free number.
  2. A loan officer gets in touch with you.
  3. You get a prequalification based on your basic financial data. MofO now has a nice app for getting prequalified.
  4. When you’re ready to buy, you apply for a mortgage and go through the full underwriting process.

Mutual of Omaha’s process works well for homebuyers who don’t want a full online application.

The lender’s mobile app gets solid reviews as a way to get prequalified and communicate with your loan officer.

Pros & Cons

Pros

  • Focused on Veterans for VA Loans
  • Personalized Customer Service
  • Competitive Interest Rates
  • Standard Variety of Loans
  • Nice App for Prequalifications

Cons

  • Not Fully Online
  • Bank Could Be More Transparent Before Application
  • Little In-Person Access to Offices
  • No 10- or 12-Year Terms

Alternatives to Mutual of Omaha Mortgage

Mutual of Omaha Mortgage will best serve a homebuyer who wants personalized guidance but doesn’t need a face-to-face conversation. MofO excels with VA loans.

If Mutual of Omaha Mortgage doesn’t seem quite right for you, consider one of these alternatives:

  • Quicken Loans / Rocket Mortgage: You’ll get a more automated and fully online experience, but your customer service may not be quite as responsive compared to MofO.
  • USAA: If you’re shopping for a VA loan, chances are good you’re eligible to join USAA, a military-only insurance and financial services association. Naturally, USAA excels with VA lending.
  • Chase: With branches throughout much of the nation, Chase excels with face-to-face borrowing while also offering full online access.
  • Lending Tree: I wish MofO had more transparency before you apply for a loan. Lending Tree can show you several loan offers without requiring a full application.

Mutual of Omaha Mortgage works well for a customer who wants personalized guidance throughout the loan application process but doesn’t need to visit a local branch office.

Mutual of Omaha Mortgage also provides good service to veterans and spouses of veterans who want to use their VA benefits to buy a home.

Shoppers who want a fully online and automated process or shoppers who prefer a face-to-face conversation with a loan officer should shop elsewhere.

Mutual of Omaha Mortgage

Overall Rating

9.5

Bottom Line

Mutual of Omaha Mortgage provides good service to veterans and spouses of veterans who want to use their VA benefits to buy a home. MOO works well for a customer who wants personalized guidance throughout the loan application process but doesn’t need to visit a local branch office.

Pros

  • Personalized Customer Service
  • Competitive Interest Rates
  • Specializes in VA Loans
  • Variety of Loan Options

Cons

  • Not Fully Online
  • No 10- or 12- Year Terms

Interest Rates

9.0

Customer Service

9.0

Loan Options

9.0

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