Citizens Bank Mortgage Review 2021: Discounts for Account Holders, but Website Lacks Transparency on Rates and Fees

An image to accompany a review of Citizens Bank mortgages Illustration/NextAdvisor

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Citizens Bank offers home loans and home equity lending products among its private and commercial banking products. It is part of Citizens Financial Group, which is the 15th largest national bank.

With services available online and at approximately 1,000 branches in 11 states in the New England, Mid-Atlantic, and Midwest regions, borrowers have a few different means of learning about and applying for a loan. Citizens Bank offers rate discounts when you set up automatic payments, plus a home rewards program that homeowners in select states can use to get cash back after buying or selling a home through Citizens Bank’s program. The application process is digital from start to finish, and customer service reps and loan officers are accessible via phone call. 

A couple of Citizens Bank’s drawbacks are its website and transparency of available pricing. The website isn’t the most aesthetically pleasing, with some menu options not displaying properly on certain browsers. Besides a handful of rates listed, we found it challenging to find other mortgage pricing on the website. Advertised rates are based on high-creditworthy profiles. To get a customized rate quote, you would have to get a hard credit pull during the application process, which temporarily hurts your credit score but is necessary to get a mortgage. 

Here’s what to know about Citizens Bank’s mortgages before applying.

Pro Tip

According to Experian, most modern credit scoring systems treat hard credit checks for mortgages within a 30-day period as one inquiry.

Pros and Cons of Citizens Bank Mortgages 

Pros

  • Available in all 50 states

  • Autopay rate discount of 0.125% (with existing account with Citizens Bank)

  • Online mortgage application process

  • Offers FHA and VA loans

Cons

  • Doesn’t offer USDA loans

  • Physical branches only available in 11 states

  • Finding the fee schedule on the site is difficult

  • Hard credit check for customized rate quote

  • Rates listed have discounts built-in including a 25% down payment

Citizens Bank Review: Mortgage Loan Types and Products

Citizens Bank offers conventional loans as well as government-backed home loan products. Some products aren’t available in all areas, however.

Citizens Bank: Mortgage Transparency

Citizens Bank lists a handful of rate products for the 30-year and 15-year fixed-rate loans, as well as for its 7-year/6 month fully-amortizing ARM. However, prospective borrowers must sift through the fine print to learn that the advertised rates listed have a built-in autopay discount of 0.125%. The rates also are based on having a 25% down payment and credit score of 740. 

To get a customized quote based on your own credit profile, prospective borrowers need to go through the application process, including the hard credit pull. Finding information on upfront lending costs is difficult on the Citizens website. After searching through the website, including reading the fine print, we had to call a loan officer at Citizens Bank to get information on the closing costs and other upfront lending costs involved.

Also in the fine print, we found that customers who live in states with Citizens Bank branches must have their mortgage payment deducted from a Citizens Bank account to take advantage of the autopay discount. For those who live outside the area of Citizens Bank’s physical footprint, it’s possible to get an autopay discount regardless of the financial institution used for mortgage payments.

Citizens Bank: Mortgage Rates and Fees 

Citizens Bank doesn’t charge prepayment penalties nor application or origination fees. Instead, the bank charges what it calls processing and underwriting fees, which we learned when we spoke to a loan officer by phone and asked. These fees are based on the size of the loan, type of property, and characteristics of the borrower. According to a Citizens Bank loan officer, it’s typical to pay between $800 and $900 total for processing and underwriting fees, although some loans have lower or higher fees.

Depending on your region, it’s possible to receive additional discounts on rates and fees. A 0.0125% autopay discount is offered to everyone who sets up regular mortgage payments to be deducted from a checking account. 

Citizens Bank has a program called Your Home Rewards that matches borrowers with a real estate agent and loan officer in Citizens network. If you use this program to buy or sell a home, you may be eligible for $350 to $6,500 in cash back. The company advertises earning double the reward if you use the bank to finance a home after a sale through the program.   

Refinancing With Citizens Bank

Refinancing a mortgage with Citizens Bank is very similar to getting an initial mortgage. It’s possible to get a cash-out refinance or refinance to a shorter term loan. You can find a checklist on the website to help you navigate the process and online application. Refinancing can take anywhere from two weeks to 45 days (or longer), depending on the situation. 

Fees on refinancing with Citizens Bank are similar to mortgage fees, with some differences based on whether you’re refinancing a second home or investment property, and other factors. Same as the purchase process, you need to call a loan officer or go through the application process to know all the fees involved.

Citizens Bank Compared to Other Mortgage Lenders

Citizens BankAlly MortgageSebonic Financial
Minimum credit score620620620 for conventional, 550 for FHA
Minimum down payment3% for conventional loans*, 3.5% for FHA loans, 0% for VA loans, up to 20% for jumbo3% for conventional, up to 20% for jumbo5% for conventional, 3.5% for FHA, 0% for VA and USDA
Where does the lender operate?All 50 states and Washington, D.C.37 states and Washington, DCAll 50 states and Washington, DC
Major loan typesConventional, FHA, VA, construction, jumbo, refinanceConventional, jumbo, ARM, refinanceConventional, FHA, VA, USDA,jumbo, refinance
*In many cases, down payments lower than 20% will come with private mortgage insurance (PMI), which covers the cost of the outstanding mortgage if the borrower defaults on their loan.

How to Shop Around to Get the Best Mortgage Rate

Mortgage rates change regularly, and every lender is different when it sets mortgage rates. Your rate will be a combination of market rates and your personal credit qualifications, as well as the size and type of loan you get. Consider starting with a mortgage preapproval. With a preapproval, you have a better idea of your rates and terms, as well as how much you can borrow. 

You don’t have to rely on one lender, though. Shop around for different rates and terms so you can potentially save thousands of dollars in interest and fees during the course of the loan term. Gather quotes from several mortgage lenders and compare rates and closing costs. An online mortgage calculator can help you make a more informed decision. 

Here’s an example using a home with a price of $250,000 with a 10% down payment and 30-year term.

INTEREST RATEMONTHLY INTEREST AND PRINCIPAL PAYMENT INTEREST SAVED OVER LOAN TERM
3.25%$979
3.04%$953$4,680

With a 3.25% interest rate, the monthly principal and interest payment comes out to $979. But with a 3.04% interest rate, you save $26 a month on interest costs. This difference in monthly interest seems like a small amount, but $26 adds up over time — that’s $9,360 in savings during the course of 30 years. 

Bottom Line

Citizens Bank offers an attractive 0.125% autopay discount, but with caveats: you must open a checking account (if you don’t have one already) with Citizens Bank, and you need to use this account to pay the mortgage.

The online application process seems smooth enough at first glance, but lender fees were only accessible by phone call. One major drawback that stands out compared to other lenders is a hard credit check is needed to get a customized rate quote.

Citizens Bank could be a good option for well-qualified buyers looking for a conventional mortgage with an existing relationship with Citizens Bank. Borrowers should take caution, though. Depending on your credit profile, the rates you see with Citizens website likely won’t be the rate you will get. The fine print states you’ll need a 740+ credit score and have a 25% down payment handy. It may be best to shop other lenders that will prequalify you with a rate quote and soft credit check before applying with Citizens Bank.