Mr. Cooper offers a few notable benefits that may make it the right choice for select borrowers. For example, the company’s Close on Time Guarantee can be a major benefit for someone making the jump from renting to owning and who must be out of their current space by a specific date. Mr. Cooper’s online application process is also a convenient benefit, combining a customer-friendly buying process with an easy representative connection.
There are some areas where Mr. Cooper can improve in the future. Its offerings are similar to most other lenders with the exception of U.S. Department of Agriculture (USDA) loans, and fees are less transparent than competitors. Potential borrowers should also note the company’s history of settlements, which include payouts for foreclosure and banking violations.
- Applicants looking for a conventional mortgage loan
- Those who value an online, easy application
- Anyone looking for rate discounts
- Online application process: Mr. Cooper offers an online application and closing process, helping you avoid spending hours on the phone or in the bank with a closing representative.
- Close on Time Guarantee: Mr. Cooper guarantees your closing date — and if it misses it because of a representative error or delay, the company will pay your first month’s loan premium and interest.
- 45-day rate-lock option: If you’re shopping for preapproval from multiple lenders, you can lock in your interest rate for up to 45 days after getting preapproved from Mr. Cooper.
- No USDA loans: If you’re looking to buy a home in a rural area, you might want to consider a no down payment USDA loan, which Mr. Cooper does not currently offer.
- No information on fees or closing costs: Mr. Cooper closing costs and lender fees are not published online, and you’ll need to get a personalized quote to learn more about what you’ll pay for your loan.
- Shaky company history: After posting a net loss of $20 million, Nationstar Mortgage rebranded itself as Mr. Cooper in 2017. Since this time, the company has faced additional financial and legal troubles, including more than $90 million in customer settlements.
Mr. Cooper Ratings at a Glance
Mr. Cooper Mortgage Qualifications
Like other mortgage lenders, Mr. Cooper has its own set of loan qualifications you must meet before you get funding. Its credit requirement is relatively flexible, with some loan options available with scores as low as 580 points. You’ll need a minimum down payment of 3% to qualify for a conventional mortgage loan, which is low in the industry. Mr. Cooper does not publish its debt-to-income (DTI) ratio guidelines, but most lenders associated with Fannie and Freddie require a DTI ratio of less than 43%.
Mr. Cooper follows Fannie and Freddie guidelines for income and asset qualification as well, which means you’ll be required to submit items like W-2s or other proof of income. If you’re self-employed, you may need to provide extra income documentation to prove that your income is sufficient to last through the life of your mortgage loan.
Mr. Cooper Mortgage Loan Types
Mr. Cooper offers a range of both conventional and government-backed mortgage loan options, including:
- Conventional loans: Conventional mortgage loans are the most common type of mortgage loans and can be used to purchase any type of property. Mr. Cooper offers conventional mortgage loans with fixed and adjustable interest rates, and down payment requirements start at 3%. Like other mortgage lenders, if you have less than 20% to put down on your loan, you’ll need to pay for private mortgage insurance (PMI).
- Federal Housing Administration (FHA) loans: FHA loans are government-backed mortgage loans that offer more flexible credit qualification criteria. While you can qualify for an FHA loan with a credit score as low as 580, you will need to pay additional FHA fees each month. FHA loans don’t require PMI, but you’ll need to bring a down payment equal to 3.5% of your home purchase price or more. There are also FHA streamlined loans available to help you qualify with less paperwork if you’re refinancing to lower monthly payments or another benefit.
- Veterans Affairs (VA) loans: VA loans are mortgage loans exclusively for those who have served in the military and select members of their families. Mr. Cooper offers VA loans with standard qualification criteria, including a 0% down payment requirement. Mr. Cooper also offers VA interest rate reduction refinance loans (IRRRLs), which are a streamlined option similar to FHA streamlines.
- Jumbo loans: If you’re purchasing a home in a higher-value area, you may need to purchase a loan that’s too large to conform to Fannie and Freddie standards. Mr. Cooper offers jumbo loans with balances up to $2.5 million.
- Refinancing options: In addition to mortgage loans, Mr. Cooper also offers both standard and cash-out refinance options.
Most people use a mortgage loan to purchase a new home — and rising property values are making loans necessary for more investment properties as well. Online mortgage lenders like Mr. Cooper Group Inc. provide a streamlined buying experience, with a robust series of online loan options that makes applications easier. While you should consider the company’s history before submitting an application, it could be a more affordable option for those looking to lock into a low rate early in their loan’s life.
Mr. Cooper publishes average rates for new loans, which are based on a dynamic range of changing market factors. Mr. Cooper rates are about in line with industry averages, with an average annual percentage rate (APR) of 6.754% for a 30-year mortgage loan. Individual rates and qualifications will vary depending on the loan product you’re applying for and your personal details.
Mr. Cooper offers a full range of customer service options, allowing you to connect with a representative over the phone or via live chat. Call 833-685-2565 to contact customer service via phone — representatives are available from 7 a.m. to 8 p.m. Central Standard Time Monday through Thursday, with customer service closing an hour early on Friday. Live chat is also actively monitored during these hours. You can access the chat feature through the Mr. Cooper homepage. Note that you’ll need your Social Security number or loan service number before calling.
Mr. Cooper was founded in 1994 as Nova Credit Corp. before moving the business operation to Dallas. It is a publicly traded company on the Nasdaq Stock Exchange, trading under the ticker COOP. It is also a component of the S&P 600, a major index compiling 600 of the largest companies in the United States when measured by total market capitalization.
Before getting a loan with Mr. Cooper, know that the company was formerly known as Nationstar Mortgage before 2017. Since then, the company has been involved in a series of financial and legal difficulties. In 2018, Mr. Cooper paid out $17 million in settlements to customers in New York and California after claims of banking law violations. It also paid out more than $90 million in settlements in 2019 for mishandling customer foreclosures.
Though mortgage rates are constantly changing, Mr. Cooper offers transparent average rate calculations that you can use to narrow your search.
Mr. Cooper does not offer every type of mortgage loan or product that you might need. For example, it does not currently offer USDA loans, which are government-backed mortgage products with 0% down payment requirements for those in rural and suburban areas. Though there is no Mr. Cooper home equity loan option, it can be a viable mortgage lender for those who are searching for a basic mortgage product and who value an easy application process.
Loan Types
The two major types of mortgage loans are conventional and government-backed. Conventional loans are offered by private lenders and are not insured or guaranteed by the government. They usually require a higher credit score and a larger down payment, usually around 20% of the home’s purchase price.
Government-backed loans are insured or guaranteed by government agencies such as the FHA or the USDA. These loans are designed to make homeownership more accessible, particularly for borrowers with lower credit scores or limited down payment funds.
Choosing a loan type before you start comparing lenders can guide your search when it comes to submitting preapprovals. Research credit requirements and calculate your down payment as a percentage to decide which mortgage loan type is right for you.
Interest Rates
Every mortgage loan includes an interest component, which is a payment you make to your lender in exchange for providing you with a loan. Interest is calculated as a percentage of the total loan value and expressed in an annual percentage rate.
Compare the interest rates offered by different lenders, as it will have a significant impact on the overall cost of your mortgage. Even a slight difference in interest rates can translate into thousands of dollars over the life of the loan. Most mortgage lenders publish daily loan rates, which you can use to guide your search for the right lender.
Fees and Closing Costs
Closing costs and lender fees are additional expenses that can impact the cost of your mortgage loan. When you apply for preapproval from a lender, note any closing costs listed as your responsibility. Your lender must provide you with an itemized list of closing costs due at your loan closure meeting, but the best mortgage lenders make fees available online before submitting an application.
Mr. Cooper Mortgage vs Competitors
Buyers interested in learning more about an online mortgage lender may want to consider options like Rocket Mortgage over Mr. Cooper, which offers a 100% online buying process. Take a look at the competition to make a proper comparison as you hunt for a mortgage and your dream home.
Available in: CA, CO, CT, DC, FL, GA, IL, MD, MA, MI, NH, NJ, NY, NC, OH, PA, RI, SC, TN, TX, VA, WA
Is Mr. Cooper Mortgage Right for You?
Is Mr. Cooper a good lender? Overall, Mr. Cooper is an average mortgage company with a few notable benefits. Its range of loan types is average with the exception of not offering USDA loans, and it does not offer as many home equity solutions as competitors.
Frequently Asked Questions
Is Mr. Cooper a reliable mortgage company?
Mr. Cooper is a legitimate and reliable mortgage lender because it services the loans that it originates and adheres to guidelines set in place by the U.S. Department of Housing and Urban Development for home loans. Customer reviews indicate that the company’s customer service may be less reliable when compared to other online lenders like Rocket Mortgage. This can lead to customer frustration, especially if you’re looking for more trust and guidance when choosing a loan type.
Does Mr. Cooper do a hard credit pull?
Yes, Mr. Cooper requires a hard pull on your credit when you apply for Verified Approval. You will not face a hard credit pull when you apply for preapproval, which can make this a good first step if you’re still comparing mortgage loan rates.
What is the average closing time for Mr. Cooper?
Mr. Cooper does not disclose an average closing time for its mortgage loans. However, it does offer a Close On Time Guarantee, which ensures that your mortgage loan will be closed before an estimated date provided by you when you apply for your loan. If Mr. Cooper’s team misses your estimated closing date, the company will pay your first month’s mortgage payment, including your principal and interest.
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