Carrington Mortgage Review: Low Down Payments, Poor Servicing

Carrington Mortgage Review: Low Down Payments, Poor Servicing

Carrington Mortgage Services offers useful options if you have less saved for your down payment, but it doesn't enjoy the best reputation for customer satisfaction.

Editor's Rating

3.0/5.0

Good for

  • Options to help reduce your mortgage down payment
  • Low origination fee of $99 helps bring down closing costs
  • Licensed to lend in all states except MA and ND

Bad for

  • Interest rates on all products are average or slightly higher than average
  • High ratio of customer complaints as a mortgage servicer
  • Brick-and-mortar locations only active in some states

A direct mortgage lender operating in almost every US state, Carrington Mortgage Services provides a wide range of government-backed home loans that can be helpful if you're trying to purchase a home with low savings. However, our review of the information available on Carrington suggests that its rates and fees are on par with its competitors, while its performance in customer satisfaction is well below average.

Carrington: Lower Down Payments but Poor Servicing

Carrington is a direct lender with many choices for mortgages with lower down payments, but our research suggests that the company falls far below the industry average for customer service. Carrington's loans include the popular FHA loan as well as VA loans for military veterans and USDA loans for lower-income households in rural neighborhoods. Each of these programs is meant to help consumers buy a new home or refinance a more expensive mortgage by reducing upfront payments.

Although Carrington handles its loan servicing in-house, this hands-on approach doesn't seem to result in greater customer satisfaction. Even though Carrington's representatives explained that the lender makes an effort to distinguish itself through more convenient service, the available data on Carrington's originations and official complaints showed that the company experiences a high proportion of complaints from its customers.

How Do Carrington Mortgages Compare?

Carrington's mortgage rates were quite high compared to the big banks, but accounting for the effect of mortgage points showed that the lender's rates are actually about average. To make this comparison, we collected mortgage estimates from three major banks and Carrington itself based on the same profile for a purchase loan. Our estimates used a purchase price of $198,000, down payment of 10% and credit score of 740. Use our mortgage comparison tool below if you'd like to see current rates for your loan amount and zip code.

30-Year Fixed Rate Mortgage Estimates at Major Banks

CarringtonChaseBank of AmericaWells Fargo
Interest Rate4.38%3.88%3.75%3.88%
APR4.46%4.17%4.10%4.15%
Monthly P+I$864$838$825$838
Discount Points0.150.250.440.00

See Mortgage Rate Quotes for Your Home

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The resulting rates showed that as a smaller direct lender, Carrington quoted a higher initial rate on the typical 30-year fixed rate mortgage than any of the big banks. However, closer examination of the mortgage discount points shows that the low interest rates reported by Chase and Bank of America require the borrower to pay upfront in order to "buy down" the ongoing rate. Carrington's rate was much higher, but it came with lower upfront costs for points. Wells Fargo's estimate was cheaper in both rate and points, but the bank used more generous assumptions to arrive at its figures.

Because mortgage rates follow national trends and track closely among different lenders, it's difficult to identify Carrington as a better or worse choice simply based on the interest rate. While your personal details will influence the mortgage rates you receive, your final choice of mortgage lender will depend on its selection of loan products and the quality of its service when it comes to your application process and loan payments.

Customer Service and Mortgage Servicing

Our data on Carrington's customer satisfaction revealed that the company performs quite poorly compared to the rest of the mortgage lending industry. Although its representatives stressed that the company strives to provide a more satisfactory experience by servicing their home loans in-house, CFPB complaints for Carrington were proportionately higher than many of the larger lenders we studied.

Mortgage-Related Complaints at Major Banks, 2013-2017

CompanyMortgage OriginationsCFPB ComplaintsRatio2017 JD Power Rating
Carrington73,2441,8832.57%660
Chase948,00014,7781.56%764
Wells Fargo2,155,22225,1821.17%745
Bank of America1,172,11328,1872.40%767

The data we compiled on Carrington's ratio of mortgage-related complaints versus total originations showed a relatively high rate of incidents since 2013. The company experienced a complaint rate of 2.57%, or 1 report per 39 mortgage originations. While not all complaints in the CFPB database are legitimate grievances, Carrington did end up with a worse performance than any of the three major consumer banks in the US. In addition, the latest JD Power survey of consumer satisfaction with mortgage servicing awarded Carrington with the worst score out of the 27 major lenders included in the study.

Mortgage Loan Products at Carrington

In addition to its own conventional and jumbo loans, Carrington offers a full slate of government-backed mortgages for qualified borrowers looking to reduce their down payment obligations. These "agency" loans include FHA, VA and USDA loans, as well as down payment assistance programs run in partnership with housing authorities in 13 states. These options make Carrington a flexible financing option if you feel that you haven't saved enough to meet the standard down payment of 20%.

Home Loan Products at Carrington

Conventional Loan
  • 15- and 30-year fixed rate mortgages
  • Maximum of $417,000 on single-family homes
Jumbo Loan
  • Mortgages between $417K and $2.5 million
  • 20% minimum down payment
FHA Loan
  • 3.5% down payment with credit score of 580 or more
  • Purchase and streamline refinancing for up to 30-year terms
VA Loan
  • Exclusive to veterans and servicemembers
  • No down payment and no mortgage insurance
USDA Loan
  • Mortgage assistance in lower-income rural areas
  • No down payment and minimum credit of 550

Short of requesting a formal Loan Estimate, there was little information about Carrington's closing costs. Although the underwriting fee of $99 is somewhat lower than the average for mortgage lenders as a group, you'll probably find that other closing costs like the origination fee and appraisal fall in line with the norm for direct lenders. In addition, you have the option to shop for many of the third-party services involved in a mortgage on your own. Done correctly, this can reduce your out-of-pocket expenses on inspections and title insurance —whether you choose to apply for a home loan from Carrington or one of its competitors.

Where Can You Get a Mortgage With Carrington?

Carrington is licensed to originate and service mortgage loans in every state other than Massachusetts and North Dakota. While the company itself is based out of Anaheim, California, it has branches in twenty different states and grants borrowers access to loan servicing and management through its website.

States With Carrington Branch Offices

  • Arizona
  • California
  • Colorado
  • Connecticut
  • Florida
  • Georgia
  • Hawaii
  • Illinois
  • Indiana
  • Kentucky
  • Maryland
  • Missouri
  • Nevada
  • Ohio
  • Oregon
  • Rhode Island
  • South Carolina
  • Tennessee
  • Texas
  • Virginia

How Does Carrington Compare to Today's Mortgage Rates?

If you'd like to get a sense of how Carrington's rates compare to other lenders, use the table below to explore alternative mortgage companies.

LenderAPRMonthly PaymentLoan Fees
Homestead Funding Corp4.654%$822.62$545.00Inquire Now
Sebonic Financial4.865%$845.76$0.00Inquire Now
Citibank, N. A.4.926%$834.64$3,207.00Inquire Now
ConsumerDirect Mortgage, a division of First Bank4.679%$822.62$995.00Inquire Now
Flagstar Bank4.792%$834.64$767.00Inquire 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.

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