Filo Mortgage review

When you’re ready to apply for a mortgage, it’s best to compare several lenders to get the best rate. If you’re looking for a wide variety of loan offerings, Filo Mortgage could be an option. Filo Mortgage is an online lender that offers the following loan types: 10- to 30-year conventional, adjustable rate, VA, FHA, USDA, first-time homebuyer, jumbo, home equity, HELOC, and refinance.

Best for affordability and low rates

Filo Mortgage advertises that it doesn’t charge lender fees, which could make this loan more affordable for consumers short on cash. The term "lender fees" typically refers to the origination fee, which includes processing the application, underwriting the loan, funding the loan, and administration services. Lender fees usually equal between 0.5% and 1% of the loan. When lenders offer a loan with no fees, borrowers typically pay for lender services in another way, usually in the form of higher interest rates or having the lender fees added to the loan.

Filo Mortgage offers competitive rates with a low rate guarantee. The company advertises that it keeps rates low because of the way it leverages digital technology.

Filo Mortgage pros and cons

As with most mortgage lenders, you'll find some pros and cons with Filo Mortgage. Here is what we found:

States in which Filo Mortgage operates

To apply for a Filo Mortgage loan you must live in one of the following states: Alabama, Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Louisiana, Maryland, Michigan, Minnesota, Missouri, New Jersey, North Carolina, Oregon, Pennsylvania, Virginia, Tennessee, Texas Utah, Washington.

What to consider before applying

Before applying for a mortgage, try to boost your odds of approval. Lenders usually focus on the following: 

• Your credit score: You’ll get a better interest rate if your credit score is in the mid- to high-700s and above. If your credit score is between 620 and the mid-700s, you might be quoted a higher interest rate. If your credit score is below 660, you might not qualify for a conventional loan from Filo Mortgage until you raise your score. If you need help raising your credit score, the Consumer Financial Protection Bureau recommends that you don’t use companies that charge you to fix your credit score. Instead, contact a housing counseling agency approved by the Department of Housing and Urban Development.
• Debt-to-income ratio (DTI): Lenders also look at how much you make and how much you spend to determine whether you can afford a mortgage payment. They do this by calculating your DTI. You can determine your DTI by adding up all your monthly debt payments and dividing that number by your gross monthly income. For example, if your monthly debt payments (including your mortgage) equal $3,500 and your gross monthly income is $10,000, your DTI would be 35% — 3,500 divided by 10,000 equals 35%. Most lenders consider a DTI below 36% good. Some loan programs, such as FHA loans, allow a DTI of up to 50%. If your DTI is larger than that, you’ll probably need to make more money or spend less to be approved for a mortgage loan.
• Down payment: Mankind a down payment of 20% of the price of the home is the gold standard. You can qualify for many mortgage loans with less than 20% down, but you might have to pay for private mortgage insurance. With an FHA loan, for example, you can qualify for a mortgage with as little as 3.5% down.

How to apply for a loan with Filo Mortgage

When you apply for a loan with Filo Mortgage, you’ll work with a representative who will guide you through the process. Here’s what you'll do:

1. Complete the online application: Be ready to provide proof of identification, such as a driver's license or passport. You will also need to provide proof of income and assets.
2. Read and sign disclosure forms: These should tell you the cost of the loan and your total monthly payment.
3. Submit all required documents: This includes your identification, pay stubs, tax returns, and bank statements.
4. Wait to receive approval: During this step, the underwriter, a financial expert, reviews the documents you've provided to determine whether you qualify for the mortgage you're seeking.
5. Close on your loan: A notary is sent to your home to witness the signing of the contract. Once this happens, you're responsible for the mortgage loan and must repay it according to the loan terms. 

How to qualify for a loan with Filo Mortgage

Qualifying for a loan with Filo Mortgage depends on how much you want to borrow, your credit score, your DTI, and your down payment. If your credit profile isn’t in the best shape, you could still qualify for a loan product with less strict requirements. For example, Filo Mortgage offers VA loans to veterans and active service members without any credit requirements, and FHA loans are available to borrowers with scores as low as 500. 

How to refinance with Filo Mortgage

If you have a mortgage loan with a high interest rate, you might want to refinance the loan to get a lower rate. This could benefit you if interest rates are lower today than when you first got the mortgage or your financial situation has improved and you can qualify for a better rate. 

Refinancing to a lower rate to lower your monthly payment is the most common reason people refinance with Filo Mortgage, but isn’t the only one. Other reasons borrowers refinance with Filo Mortgage include:

• To get a shorter term: You might want to change your loan term from 30 years to 20 or 15 years to pay off the loan sooner. Doing so saves you money in interest payments over the life of the loan. With many mortgage loans, however, simply making larger payments each month can accomplish the same goal.
• To get cash: If you have enough equity in the home, you could refinance the loan for more than what you owe and take the difference in cash. This is called a cash-out refinance, which many people use to make repairs, consolidate debt, or pay for college. When you refinance a loan, you're paying off your old mortgage and getting a new one. A refinance loan leaves you with one loan, as opposed to a home equity loan, which leaves you with two loans to pay. The advantage of a home equity loan would be that you wouldn’t pay closing costs like you would with refinancing.
• To switch from an adjustable-rate mortgage (ARM) to a fixed-rate loan: If your ARM has adjusted to a higher rate than you would be paying with a fixed-rate loan, it might make sense to refinance. Filo Mortgage suggests borrowers should only refinance if the improvement is at least 0.5%.
• To remove mortgage insurance: Some loans, such as FHA loans, require borrowers to pay mortgage insurance for the life of the loan. Conventional loans require this only until you have 20% equity in the home. Once you reach 20% equity with an FHA loan, for example, you might want to refinance to a loan product that doesn’t require mortgage insurance.

Once you’ve determined why you want to refinance, the next step to take with Filo Mortgage is to apply and lock in a rate. You’ll need to show proof of your income, assets, and tax returns, in certain cases. Filo Mortgage doesn’t charge lender fees, but you will be responsible for other closing costs, such as taxes and title fees. If you choose, you can roll closing costs into your mortgage, though your payments will be a little higher. As long as your home doesn’t need an appraisal, you should complete the refinance in two to three weeks.

How Filo Mortgage compares

If you’re looking for a home loan, take time to comparison shop. While Filo Mortgage offers competitive interest rates and no lender fees, it’s still a good idea to explore all your options. Compare several lenders, and look at interest rates, terms, and mortgage offerings to find the best fit for your situation. 

Methodology

To determine the best mortgage companies, Fox Money evaluated lenders based on several different categories: rates and fees, reputation, eligibility, efficiency, customer experience, and discounts and perks. We also looked at the types of loans offered by each lender for research purposes only, they did not factor into the overall score. We assigned a score out of five stars to each lender based on our findings. 

Learn more about how Fox Money rates lenders by checking out Mortgage Lender Rating Methodology.