US Bank Home Mortgage Review

US Bank Mortgage is the mortgage lending arm of US Bancorp, the parent company of US Bank, which the 6th largest bank in the United States. With over 2500 branches across the US and over 4100 ATMs, US Bank offices can be found close to almost any location in the continental United States.

US Bank Mortgage offers competitive rates on a wide variety of conventional mortgage products. Current rates can be viewed at the Bank’s website at: http://www.usbank.com/cgi_w/cfm/personal/products_and_services/mortgage/interest_rates.cfm

Fixed rate mortgages are available for 10, 15, 20, or 30 year terms, and can be bought down by paying points (or percentages of the balance owed). US Bank Home Mortgage offers three or five year ARMs, also with the option to buy down the rate, and Jumbo 15 or 30 year fixed rate mortgage loans for balances exceeding $417,000 (or $625,500 in Alaska or Hawaii).

Twenty percent down payments are required for conforming and Jumbo fixed rate or ARM mortgages in order to qualify for US Bank’s Home Mortgage division’s best rates. They also write FHA mortgage loans with 3% down, and VA loans with 0% down. It’s refreshing to see such straightforward mortgage terms listed by a major bank.

They also provides lots of good solid general information at their website, such as a clear, simple explanation of the difference between the interest rate and the APR (annual percentage rate), and explanation of how home mortgage interest is calculated, a percentage for estimating origination fees, and the approximate dollar amount of monthly payment per $1000 borrowed for each separate type of mortgage.

Lots of excellent, free calculators are also available at:

http://www.usbank.com/cgi_w/cfm/personal/products_and_services/mortgage/interest_rates.cfm

Calculators include the standard payment calculator, a calculator for determining both how much a buyer can borrow and how much the same buyer can afford, a points calculator, and an ARM payment calculator.

The FAQs page at the website for US Bank Home Mortgage discloses a lot more solid, useful information upfront, a transparency that seems to be in short supply on many other mortgage lender sites.

Explained on the FAQs page are application costs, the difference between preapproval and prequalification, explanation of escrow, PITI, hazard insurance, origination fees, closing costs, and much more:

http://www.usbank.com/cgi_w/cfm/personal/products_and_services/mortgage/faqs/faq.cfm

US Bank Home Mortgage has weathered the subprime loan crisis better than a lot of other mortgage lenders, perhaps because of their more traditional approach to mortgage underwriting. US Bancorp stock has held steady the first quarter of 2008, unlike a number of other financial institutions that are currently all over the map and extremely volatile.  

Warren Buffett actually increased his stake in US Bancorp in February of 2008, and analysts have been recommending its stock as one of the few good places in the financial sector to park money. Dick Bove, an analyst at Punk Ziegel recently put it this way, “…these guys were not at all innovative in banking. [U.S. Bancorp] did not become involved with the capital markets activities of their peers. The net result is that few problems are being handed to the current management team. This is a huge benefit in today's markets."

 While US Bank may not offer all the bells and whistles of some of the more creative financing options that other financial institutions advertise, their rates are quite competitive and their willingness to disclose and explain their policies and procedures is exemplary. When searching for a mortgage, finding a lending institution with that kind of transparency should be as vital to a new borrower as finding a decent rate and palatable terms.