Prospect Mortgage Loans is a major mortgage provider in the United States. In 2014, Prospect Mortgage sold over 25,200 mortgages -- worth a total $6.9 billion – which made it the 9th largest mortgage company by volume of sales. Prospect was launched in 1999 and is based in Sherman Oaks, California.
How Do Prospect Mortgage Loans Work?
Once you found the property, you wish to buy apply online, over the phone or at one of Prospect Mortgage’s brick-and-mortar branches. You will need to provide lots of paperwork and financial information.
Choose whether you want a fixed or adjustable rate mortgage. As of March 2016, mortgage rates are low, so fixed rates are popular. However, buyers looking for lower rates during the initial years can get a deal by choosing an ARM. ARMs are particularly a good idea for homebuyers who plan to sell within a few years.
After completing the application and choosing the terms that work for you, you must sign all required documentation, including several disclosures. Your loan officer will prepare your documents and submit your loan for final approval.
A titled agent will then perform the settlement and escrow process. Borrowers must bring a cashier’s check to pay for the down payment and other closing fees. Prospect Mortgage will then send the funds to the property seller.
What Types Of Loans Does Prospect Mortgage Loans Offer?
- As a large mortgage lender, Prospect Mortgage offers the full range of mortgage products. These include:
- Fixed-rate mortgages with 30-year and 15-year terms.
- Adjustable rate mortgages (ARMs) with 3/1, 5/1, 7/1, and 10/1 terms. ARMs allow you to pay a lower introductory rate for the first 3, 5, 7, or 10 years. After the initial period, the mortgage rates will follow the market index. ARMs are particularly suited to buyers who plan to resell in 5 years or less.
- FHA 203(K) renovation loan. FHA 203(K) renovation loans allow borrowers to finance the purchase and renovation of properties with the same loan. They are a valuable tool for borrowers who do not have the credit history to qualify for a regular 30-year loan.
- VA Loans. The VA loan program makes it easier for eligible veterans to obtain a home loan.
- Jumbo loans. Prospect Mortgage facilitates jumbo loans provided by Fannie Mae and Freddie Mac, which make it easier for borrowers to upgrade move up in the property ladder or refinance their existing jumbo loan.
- State and Local Bond Programs. Prospect Mortgage also provides access to many bond programs offered by municipalities to help first-time buyers qualify for a loan at lower rates.
What Is Prospect Mortgage Loans’ Rating?
As of March 2016, Prospect Mortgage has an A- rating with the BBB. Moody’s rates Prospect Holding Company, Prospect Mortgage’s parent company, as Caa1. The Caa1 rating is given to companies with a stable outlook and is a reflection of Prospect’s improved profitability and its recent repurchase of nearly 68 percent of its senior unsecured notes at a 40 percent discount.
How Does Prospect Mortgage Loans Compare To Other Lenders?
Prospect Mortgage is a national direct lender that offers a broad range of mortgage products. Borrowers with less than perfect credit scores (as low as 580) and limited savings can apply for FHA loans with as little as 3.5% down payment. Prospect was among the top 10 mortgage lenders in 2014 and receives an A- rating from the BBB and a Caa1 from Moody’s.
Notice that in 2015 Prospect Mortgage was fined $7.4 million in administrative penalties by the Multi-State Mortgage Committee for charging borrowers improper fees.
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