Capital One Mortgage Review: Limited Options and Information
Capital One's online banking services may be excellent for its deposit products, buts its smaller mortgage section doesn't provide as much detail as you can find with other lenders. Despite its competitive mortgage interest rates and a strong reputation for customer satisfaction, the limited amount of loan information and low variety of products limits Capital One's utility as a home loan provider.
- Capital One Review: Limited Options and Information
- How Do Capital One Mortgages Compare?
- Customer Service and Mortgage Servicing
- Mortgage Loan Products at Capital One
- Where Can You Get a Mortgage With Capital One?
Capital One Review: Limited Options and Information
Capital One's online mortgage resources estimate fairly low interest rates on all four of its advertised products, but it doesn't share any information about its closing costs. Although your APR and mortgage rate let you calculate monthly payments, the lack of closing cost information on Capital One's website means that you'll need to request a formal Loan Estimate to figure out your upfront expenses. Loan Estimates are guaranteed to arrive in three business days, but to obtain one you'll need to divulge personal details like your social security number and submit to a "hard pull" on your credit history.
Beyond Capital One's limited set of information on mortgages, the bank isn't the best place to start if you're looking for a home loan with a smaller down payment. Although it is possible to obtain government-sponsored mortgage products like FHA loans at Capital One, the vast majority of the bank's home loans are conventional mortgages, with the standard choice of a 20% down payment or mortgage insurance premiums on your monthly bill. Finally, Capital One offers just four types of conventional loans, with only the most popular mortgage formats available.
How Do Capital One Mortgages Compare?
To compare the interest rate differences between Capital One and the rest of the major mortgage lenders in the US, we used online estimates from each bank to obtain data on a hypothetical mortgage for a $198,000 home with about 10% in down payment.
30-Year Fixed Rate Mortgage Estimates at Major Banks
|Capital One||Chase||Bank of America||Wells Fargo|
|Taxes/Third Party Fees||n/a||$7,230||$8,076||$7,565|
Capital One's mortgage rates are similar to those at other banks, but it's unclear whether the interest rates and APRs represented on its site take into account the effect of mortgage discount points or lender credits, which let borrowers adjust between interest rate and upfront costs. Buying mortgage points raises your closing costs in order to lower your mortgage rate, while taking lender credits allows you to lower closing costs in exchange for accepting a higher interest rate.
Although Capital One mentions that borrowers should expect to pay 2% to 5% of their total loan amount in closing costs, it doesn't give a dollar estimate on its individual lender fees —information that most major banks do provide. If you want to discover how much Capital One's origination fee or discount points will cost, you'll need to go through the process of obtaining a Loan Estimate from one of its mortgage loan officers.
Customer Service and Mortgage Servicing
Mortgages are complex products that require a good deal of customer support, and Capital One scores much better than average in borrower satisfaction surveys. It outperformed most mortgage lenders in JD Power's 2017 survey of consumer satisfaction with mortgage loan servicing. On the other hand, the bank incurred a higher percentage of CFPB complaints than Wells Fargo.
Mortgage-Related Complaints at Major Banks, 2013-2017
|Company||Mortgage Originations||CFPB Complaints||Ratio||2017 JD Power Rating|
|Bank of America||1,172,113||28,187||2.40%||767|
Capital One's mortgage business is dwarfed by the volume of lending at larger national banks, but its smaller scale seems to produce an advantage in terms of superior loan servicing. Relative to the number of loans it handles, Capital One's customers filed mortgage-related complaints at about the same rate as those who borrowed from other large banking institutions. However, JD Power's latest survey of customer satisfaction with 27 major mortgage servicers showed that Capital One received a much better rating than any of the big three banks, landing it in the top four mortgage companies in this area.
Mortgage Loan Products at Capital One
The limited range of Capital One's mortgage business includes just four types of conventional mortgage loans, including 30- and 15-year fixed rate loans and adjustable rate mortgages. These cover the most popular options but don't provide any choices if you're seeking lower down payments or interest-only mortgages.
|Mortgage Product||Interest Rate||APR||Monthly Payment|
|30-year fixed rate||4.00%||4.30%||$1,291|
|15-year fixed rate||3.25%||3.49%||$1,663|
|5/1 adjustable rate||3.63%||4.13%||$1,253|
|7/1 adjustable rate||3.63%||4.09%||$1,253|
The majority of people looking for a mortgage should be covered by Capital One's small selection of home loan types, but those seeking VA loans or FHA loans may not find the bank providing such options in every state. Unless you're confident that a conventional mortgage will work for you, Capital One won't give you a great deal of flexibility in your home loan options. This is especially important if you're counting on a government-sponsored program like FHA loans to reduce your down payment and increase your overall purchasing power.
For the common mortgage products that Capital One does have available, the estimated rates make no mention of whether points or lender credits factor into the scenario. Since the bank doesn't provide information about what its closing costs might look like, there isn't any easy way to tell if Capital One's mortgage rates are lowered (by buying points) or raised (by taking credits). While these interest rates appear very competitive at first glance, you'll need to verify whether or not points are involved by obtaining a more detailed estimate.
Where Can You Get a Mortgage With Capital One?
Capital One serves home buyers across the country through its online services, but those who want support in person will need to make sure they're buying a property located close to one of the bank's branch locations.
How Does Capital One Compare to Today's Mortgage Rates?
If you'd like to discover lenders other than Capital One, see the table below to compare today's mortgage rates.
|Lender||APR||Monthly Payment||Loan Fees|
|Homestead Funding Corp||4.780%||$834.64||$545.00||Inquire Now|
|ConsumerDirect Mortgage, a division of First Bank||4.570%||$810.70||$1,312.00||Inquire Now|
|Interstate Home Loan Center, Inc.||4.766%||$834.64||$295.00||Inquire Now|
|Ally Bank||4.922%||$846.73||$865.00||Inquire Now|
|Flagstar Bank||4.929%||$846.73||$979.00||Inquire Now|
Rates assume a home purchase of $200,000 in New York with a 20% down payment and credit score of 740. Estimates include origination fees and points but don't include other closing costs.