First Republic Bank Mortgage Review: Big on Jumbo Lending

Posted on January 4th, 2021
First Republic Bank Mortgage Review: Big on Jumbo Lending

One of the more unique mortgage originators out there is First Republic Bank, due to both their large volume of jumbo home loans and adjustable-rate mortgages.

Unlike most mortgage bankers that stick to fixed-rate conforming loans and home loans backed by the government, they mostly make jumbos that don’t adhere to the guidelines of those agencies.

In fact, they don’t even bother with FHA loans, USDA loans, or VA loans.

As such, they tend to cater to high-net worth individuals who are also relatively low-risk borrowers relative to the rest of the population, including billionaires like Mark Zuckerberg.

Let’s learn more about this premium mortgage lender, which may be a good fit if you need a very large home loan.

First Republic Bank Fast Facts

  • Headquartered in San Francisco, CA, founded in 1985
  • Publicly traded depository bank valued at more than $25B+
  • Offer home loans, construction loans, and HELOCs
  • Funded more than $14.5B in mortgages in 2019
  • Most of loan volume came from states of CA, MA, and NY
  • Specialize in jumbo home loans for high-net worth individuals

First Republic Bank was founded by its current CEO Jim Herbert back in 1985 in the city of San Francisco.

Today, the company is publicly traded on the NYSE and valued at more than $25 billion.

Based on their numbers through the first nine months of 2020, they likely originated more than $20 billion in home loans last year, which would be quite a jump from 2019.

Most of their loan volume comes from just a few states, including California, Massachusetts, and New York, though they’re nationally licensed.

Perhaps more interesting, about 75% of the home loans they extend to customers are adjustable-rate mortgages.

That’s basically unheard of in the industry, especially with fixed mortgage rates breaking record lows left and right.

In fact, the 7/1 ARM accounted for nearly 40% of their mortgage business, while the 5/1 ARM grabbed another 25%.

The rest went with a more traditional 30-year or 15-year fixed, which tells you their clients often put their money to work elsewhere, and are likely able to pay off their loans whenever they wish without fear of a rate adjustment.

How to Apply for a Mortgage with First Republic Bank

  • It’s unclear if they offer a digital mortgage application
  • You’ll need to visit a branch, call them, or request a call to get started
  • Expect a thorough underwriting process since they deal with high-dollar loan amounts
  • Loan processing, underwriting, and funding are done in-house and they service their own loans

To get started, you’ll either need to visit a physical bank branch, call them up on the phone, or fill out a short contact form on their website and wait for a call back.

My assumption is they offer a very high-touch, personalized home loan experience, as opposed to say a Rocket Mortgage or other fintech-fueled lender.

That’s not to say they don’t offer a digital mortgage application as well (unknown), but when you’re dealing with super jumbo loans, they likely do a bit more hand-holding.

And because they’re dealing with high-dollar loan amounts, there’s a good chance you’re underwriting process will be a bit more rigorous, with mention of three years of tax returns (as opposed to the standard two) on their application checklist.

I wish they’d share about their home loan process, but their website is a bit light on details.

However, they do seem to process, underwrite, and fund loans in house, and there’s a good chance they’ll service your loan as well since it’ll likely stay in their bank portfolio.

Home Loan Programs Offered by First Republic Bank

  • Home purchase loans
  • New construction loans (all-in-one construction-to-perm)
  • Refinance loans (rate and term and cash out)
  • Jumbo home loans
  • Conforming home loans
  • Home equity lines of credit (HELOCs)
  • Eagle Community Home Loan (for borrowers in underserved minority areas)
  • Fixed-rate and adjustable-rate options available

As noted, First Republic Bank is big on jumbo home loans, no pun intended. In fact, roughly 80% of their total production exceeded the conforming loan limit.

And while they do originate conforming home loans as well, their average loan size exceeded $1.6 million.

In other words, they’re financing very expensive homes, mostly in very pricey regions of the country, such as California and New York.

Oh, and they’re offering mortgages to the very, very wealthy, such as Mark Zuckerberg, who went with an ARM that featured an interest rate of 1.05%.

So it’s clear they’re not your everyday mortgage lender, but if you are rich, they could be a good choice, as they’ll likely have options others won’t.

In terms of loan programs, you can get a home purchase loan, a refinance loan, or a new construction loan on a variety of different property types, including single-family homes, condos/co-ops, and multi-unit properties.

You can finance a primary residence, a vacation home (popular with the wealthy), or a non-owner occupied investment property.

To be fair, it’s not all high net-worth lending at First Republic Bank.

They also created their “Eagle Community Home Loan” program back in 2015, which offers discounted fixed rates and waived non-recurring closing costs to borrowers in underserved minority areas.

Since it was launched, they’ve extended more than $1.8 billion in mortgages to borrowers located primarily in African-American or Hispanic/Latino neighborhoods.

First Republic Bank Mortgage Rates

You won’t find mortgage rates on the First Republic Bank website, which differs from some of the other big depository banks that do feature their rates.

This doesn’t say anything about how competitive they are, it’s just not what they lead with.

Ultimately, First Republic Bank is a premium bank so you’re not going to see mortgage rates in large font and discounted lender fees.

However, as we’ve seen with some of their celebrity borrowers, they do offer very low mortgage rates, especially on adjustable-rate mortgages and jumbo loans.

But if you need pricing, you’ll need to get in touch with a banker first, then you can shop their rate with other lenders.

The one advantage First Republic Bank might have is that their competitors may not even be able to offer the same loan products, including high-dollar loan amounts and short-term ARMs.

Still, you should take the time to compare lenders, especially if we’re talking about a very large loan amount, where even an eighth of a percent difference in rate can result in hundreds of dollars a month.

First Republic Bank Mortgage Reviews

It’s somewhat difficult finding customer reviews for First Republic Bank, possibly because they deal with high-end clients who may not bother writing reviews.

Nonetheless, there are some out there if you dig a little bit. For example, they have a 3.5-star rating on Yelp from roughly 100 reviews.

You are able to fine-tune to include words like “mortgage” to see what folks said about that specific line of business.

Additionally, they’ve got a 3.8-star rating out of 5 on WalletHub based on 100+ reviews, though not all pertain to their mortgage division. Comb through and you can find mortgage-specific ones.

There are also some Google reviews for each branch if you search via Google Maps for a branch near you. But all in all, somewhat light in the reviews department.

Lastly, First Republic Bank is not Better Business Bureau accredited, but does enjoy an ‘A+’ rating based on its history of dealing with complaints.

First Republic Bank Mortgage Pros and Cons

The Good

  • Can get a very large home loan (they specialize in jumbo loans)
  • They offer portfolio loans that their competitors may not be able to
  • Offer home equity lines of credit
  • In-house loan processing, underwriting, funding
  • A+ BBB rating
  • They may service your loan after closing
  • Free mortgage calculators and home buyer resources

The Maybe Not

  • Do not offer FHA loans, USDA loans, or VA loans
  • Limited number of bank branches
  • Need to speak to someone before applying for a mortgage
  • Do not publicize mortgage rates or lender fees
  • Small handful of customer reviews

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