Mortgage Products Offered by BMO
Purchase and Refinance Loans
- Conventional Loans
- FHA Loans
- VA Loans
- Jumbo Loans
- Fixed-Rate Mortgages
- Adjustable-Rate Mortgages (ARMs)
- Second Home Loans
- Investment Property Loans
- 1% Down Mortgages
- Construction Loans
- Interest-Only Mortgages
- Physician Mortgages
- Home Equity Loans
- Home Equity Lines of Credit (HELOCs)
Loan Types Not Offered
- USDA Loans
- ITIN Loans
- Bridge Loans
- Manufactured Home Loans
- Piggy-Back Loans
- Lot Loans
- ADU Loans
- Energy-Efficient Mortgages
- Renovation Loans
- Non-QM Loans
BMO for First-Time Homebuyers
For first-time homebuyers, BMO offers several advantages:
- Low Down Payment Options: Programs requiring just 1% down.
- Down Payment Assistance: Up to $16,000 or more available, potentially covering the entire down payment.
- Flexible Credit Scores: FHA and VA loans available for credit scores as low as 580.
- Rate Discounts and Credits: Reduce your mortgage rate by 0.125% with autopay and receive up to $500 in closing cost credits.
- Close-on-Time Guarantee: Receive $5,000 cash back if your closing is delayed.
BMO for Home Equity Lending
Home Equity Line of Credit (HELOC)
- Terms: 10-year draw period and 20-year repayment period.
- Variable Rates: With an option to lock in a fixed rate for portions of your balance up to three times during the loan term.
- Rate Discounts: 0.50% reduction when setting up autopay from a BMO checking account.
- Credit Score Requirement: Typically between 650 to 680.
Home Equity Loan
- Loan Amounts: Starting from $5,000.
- Terms: Fixed repayment terms ranging from 5 to 20 years.
- Rate Discounts: 0.25% reduction with autopay from a BMO checking account.
- Credit Score Requirement: Minimum of 700.
Fees and Costs
- Closing Costs: BMO covers closing costs for owner-occupied properties but may charge a recoupment fee if the loan is paid off within 36 months.
- Annual Fees: $75 annual fee for HELOCs and an additional $75 fee for each fixed-rate lock option used.
Understanding BMO's Mortgage Rates
BMO does not publicly advertise its mortgage interest rates, except for home equity loans. To obtain a personalized rate quote, you need to apply for prequalification and consult with a BMO loan officer. Interest rates depend on various factors, including credit score, loan type, loan amount, and down payment.
Mortgage Application Process with BMO
- Online Application: Complete your personal and financial information online and upload necessary documents like W-2s, tax returns, and pay stubs.
- Prequalification: Easily accessible through BMO's website, giving you an estimate of how much you can borrow.
- Preapproval: Requires contacting a BMO mortgage specialist who will guide you through the online application.
Mortgage Calculators and Resources
BMO provides several online calculators to assist you:
- Monthly Payment Calculator
- Rent vs. Own Calculator
- Closing Costs Estimator
Additionally, BMO offers educational articles on topics like mortgage preapproval and understanding debt-to-income ratios.
Pros and Cons of BMO Mortgages
Pros
- Wide Range of Loan Options: Including specialty loans like physician mortgages and 1% down payment programs.
- Borrower Incentives: Rate discounts, closing cost credits, and a close-on-time guarantee enhance affordability.
- Flexible Credit Requirements: Options available for borrowers with lower credit scores.
Cons
- Lack of Rate Transparency: Interest rates are not readily available online.
- Average Interest Rates: Rates are competitive but align with industry averages.
- Limited Online Resources: Educational materials and online tools could be more comprehensive.
Comparing BMO with Other Lenders
BMO vs. Chase
- Loan Variety: BMO offers more specialized loan programs, including 1% down and physician loans.
- Rate Information: Chase provides advertised interest rates based on specific assumptions.
- Incentives: Both lenders offer down payment assistance and closing cost credits.
BMO vs. Bank of America
- Product Offerings: BMO provides additional loan types like construction and investment property loans.
- Online Experience: Bank of America offers a more robust online application and resource library.
- Rate Transparency: Bank of America advertises its interest rates under certain conditions.
BMO vs. Wells Fargo
- Loan Options: BMO offers a broader range of mortgage products.
- Customer Satisfaction: Wells Fargo has lower ratings in customer satisfaction surveys.
- Down Payment Assistance: Both lenders offer programs to reduce upfront costs.
Frequently Asked Questions
What was the controversy involving BMO?
BMO was involved in legal proceedings related to a subsidiary's alleged involvement in a Ponzi scheme. An appeals court overturned the verdict against BMO in September 2024.
Does BMO offer physician mortgages?
Yes, BMO offers physician mortgages with loan amounts up to $2 million and down payments as low as 5%. These loans feature flexible underwriting guidelines and may not require private mortgage insurance (PMI).
How can I find out BMO's current mortgage rates?
BMO does not advertise current mortgage rates online. To get an estimated rate, contact a BMO mortgage officer and complete an online prequalification application.
Final Thoughts
BMO presents a comprehensive suite of mortgage products suitable for a wide range of borrowers. With various incentives like rate discounts, closing cost credits, and down payment assistance, it stands as a competitive option in the mortgage market. However, the lack of rate transparency and average interest rates are factors to consider. It's advisable to compare multiple lenders to find the best fit for your financial situation.
