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Embrace Home Loans Review: Is Their Founder the Father of Mortgage Refinancing?

home loans

Embrace Home Loans Fast Facts

  • Founded in 1983 by Dennis Hardiman
  • Previously known as Advanced Financial Services Inc. before name change in 2009
  • Located in Middletown, Rhode Island
  • Fannie/Freddie, FHA, VA, and USDA-approved direct mortgage lender
  • Licensed in 49 states and the District of Columbia (not available in Hawaii)
  • Loan servicing portfolio exceeds $6 billion

I always like to read up on the history of specific mortgage lenders to see how they got their start.

And the Embrace Home Loans story is an interesting one, having started all the way back in 1983, which is a lifetime in the mortgage industry.

Originally known as Advanced Financial Services Inc., direct-to-consumer mortgage lender Embrace Home Loans began after founder Dennis Hardiman watched mortgage interest rates “fall a whopping 5 points.”

Back then, mortgage rates were nothing like they are today. In 1982, they were hovering around 17% for a 30-year fixed, and a year later had fallen to around 12%.

While neither of those rates sounds very appealing, Hardiman realized that no one refinanced their mortgages in those days.

Instead, homeowners took out a mortgage when they purchased a home, and either kept it until maturity or paid it off when they moved.

Fast forward to 2020 and most borrowers don’t keep their mortgage for more than a few years.

Oh, and the lenders that originate them don’t keep them for more than a month before they’re bundled into mortgage-backed securities on Wall Street.

So that’s how Embrace got its start – today they offer mortgage refinances and home purchase loans nearly nationwide, with roughly 700 employees and about 60 physical branches.

I tried to determine how large they are by digging into HMDA data, which put 2018 loan volume at roughly $2.3 billion.

But they also have a correspondent lending channel that launched in 2013, so it’s hard to say how much volume they do.

Anyway, let’s learn more about them.

Update: Embrace Home Loans recently partnered with Ameriprise Financial to provide its wealth management advisors and clients with mortgage financing solutions.

Applying for a Mortgage with Embrace Home Loans

  • You can apply for a mortgage directly on their website
  • Or use their loan officer directory to work with someone specific
  • They also offer the ability to get pre-qualifed via text message
  • Once approved you can track loan progress via the Embrace Home Loans Mobile App

One plus to Embrace Home Loans is the ability to apply for a mortgage directly on their website without having to speak to anyone.

However, you’re also able to call them directly or use their loan officer directory if you’ve been referred by someone specific. Or simply want to look up loan officers in your area.

You can also request a mortgage rate quote by filling out a shorter form on their website, in which case a loan officer will reach out to you.

One unique offering they have is the ability to get pre-qualified via text message.

Once you’re approved, you can use the customer portal to upload documents, e-sign disclosures, and connect your bank statements via Finicity.

You can also download the Embrace Home Loans Mobile App for free and track your loan progress without having to call or email your loan officer.

It sends real-time updates and helpful reminders, including upcoming events like your home appraisal and closing date.

So they do offer some digital mortgage attributes, similar to Rocket Mortgage.

What Types of Mortgages Does Embrace Home Loans Offer?

  • Home purchase, refinance, renovation
  • Conventional loans (Fannie/Freddie)
  • Government loans (FHA, USDA, VA)
  • Unconventional loans (self-employed and poor credit)
  • Jumbo loans
  • Higher LTV refinance
  • No down payment mortgages
  • Fixed-rate mortgages (30-year and 15-year fixed)
  • Adjustable-rate mortgages (5/1 and 7/1 ARMs)

Embrace offers just about every type of mortgage you can think of, including home purchase loans, refinance loans (cash-out and rate and term), and renovation loans.

You can get a conforming mortgage backed by Fannie Mae or Freddie Mac, along with a jumbo loan up to $3 million.

They offer all the main government home loan options, including FHA loans, USDA loans, and VA loans.

Additionally, you can get a renovation loan via the FHA 203k program.

Their so-called “unconventional loans,” which are known as “beyond by Embrace,” include some unique programs other lenders may not offer.

This includes mortgages for the self-employed (12-month bank statement program), jumbo loans with high LTVs, poor credit down to 580 FICOs, and financing on non-warrantable condos with a higher concentration of commercial units.

You can also get a no down payment mortgage (up to 101% CLTV) that features an interest-only piggyback second mortgage with no need for mortgage insurance.

And they offer a “higher LTV refinance,” which is the permanent replacement of the Home Affordable Refinance Program (HARP) offered by Fannie Mae and Freddie Mac.

Lastly, you can get a mortgage just one day after a settled Chapter 7 or 13 bankruptcy, assuming your credit score is at least 580.

They’ve basically got anything a borrower could wish for, so you shouldn’t be limited in any way with regard to loan program.

Embrace Approved to Move Pre-Approval

The company also offers a fully underwritten approval known as “Approved to Move” that can come in handy in a competitive housing market.

Instead of a mere pre-qualification, or run-of-the-mill pre-approval, your loan file is actually processed by a loan underwriter upfront.

Aside from providing you with the assurance that you’re approved for a mortgage, it gives the home seller peace of mind that you’re a serious and qualified buyer.

It’s good for a full 90 days and Embrace says “it’s virtually as good as a cash offer.”

Embrace Home Loans Mortgage Rates

While they don’t advertise their mortgage rates, you can find rate assumptions at the bottom of most pages on their website.

Their rates seem competitive, but they make a lot of strong assumptions, including a loan-to-value ratio of 70% or less. If your LTV is higher, expect a higher interest rate.

Additionally, they charge two discount points in their mortgage rate examples, meaning 2% of the loan amount comes via closing costs.

So be sure to consider the closing costs and take a look at the mortgage APR, not just the rate, when comparing their offer to other lenders.

Embrace Home Loans Reviews

The company seems to be very highly regarded, with solid reviews across a number of different platforms.

On SocialSurvey, they have a 4.9 rating out of 5 based on roughly 25,000 customer reviews.
Additionally, they have been named #1 large mortgage company in terms of customer satisfaction on SocialSurvey.

On Zillow, they have a 4.97 star rating out of 5 based on 2,500 customer reviews. Most customers seem to indicate that rate and fees are lowered than expected.

They are an accredited company with the Better Business Bureau (since 2009) with an A+ rating.

Embrace Home Loans Pros and Cons

The Good

  • Tons of loan programs (including no down payment and low credit score options)
  • Excellent customer reviews
  • ‘Approved to Move’ fully underwritten pre-approval
  • Ability to get pre-qualified via text message
  • Can apply directly on website
  • Free mortgage calculators on site
  • Free mobile app
  • Services its customers’ loans via a sub-servicer

The Potential Bad

  • Not licensed in Hawaii
  • Do not advertise their mortgage rates
  • Don’t disclose lender fees upfront on their website
  • Does not offer home equity products (such as HELOCs)

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