Axos Bank Mortgage Review: Flexible Loans to Serve More Borrowers

Axos Bank offers a bigger variety of home loan options than most lenders. That includes mortgages with flexible underwriting guidelines that could help more borrowers qualify. To get the greatest financial benefit, borrowers also need to hold a deposit account at Axos Bank. Check out our full Axos Bank Mortgage review to find out if this is the right mortgage lender for you.

Full Axos Bank Mortgage review

This mortgage lender is a good fit for: Any borrower looking for a mortgage with no lender fee. The Axos Bank Mortgage lender fee is waived for Axos Bank checking account customers, and it's easy to become a customer. Axos is also a great lender to consider if you need a super jumbo mortgage.

Top perks

No lender fee

At Axos Bank Mortgage, a borrower can get a home loan with a $0 origination fee. To be clear, the bank has a standard $995 lender fee, but this is waived if the mortgage is for $250,000 or more and the customer has an Axos Bank checking account. If you don't, you can simply open one during the application process. For account holders who need a mortgage under $250,000, the fee can't be waived -- but it is reduced by $200. This benefit also extends to Nationwide Bank customers who qualify. (Axos now owns Nationwide Bank.)

Cash back credit

The rewards checking account connection is a big differentiator between Axos Bank Mortgage and its competition. Axos offers its mortgage borrowers an annualized 3% cash back credit on mortgage payments (principal and interest), up to $100 monthly. To qualify, you must maintain a minimum average daily balance in your Total Loan Rewards Axos checking account.

Fully online application process

Axos is an online bank. Customers can complete the entire streamlined process online. You can easily apply for a mortgage, upload documents, and check your loan status throughout the process, entirely online. (Closing is still in person.)

Full-service bank

Axos Bank is a full financial service institution. That's a plus for someone who likes the convenience of maintaining several accounts under one roof. Axos offers a financial product menu that can meet many customers' needs:

• Cash back checking with no monthly maintenance fee
• High-yield savings accounts
• Certificates of deposit
• High-yield money market account
• Auto loan program
• Various business accounts including checking and money market accounts

Great for jumbo loans

Axos Bank specializes in jumbo mortgages, which are loans that exceed the limits set by Fannie Mae and Freddie Mac. The limit for a single-unit property in 2022 in most U.S. counties is $647,200. The limit is partly based on the median home value in the county, so some high-cost areas have higher limits. For example, the limit for a single-unit property in Honolulu is $970,800.

Unlike government-backed loans, conventional loans are only subject to the limit set by the lender. A loan under the federal limit is called a conforming loan, and a loan above the limit is a jumbo loan. It can be a little harder to qualify for a jumbo loan. Axos Bank Mortgage offers jumbo and super jumbo mortgages as high as $30 million, with up to 90% loan-to-value (LTV) ratio.

Great for nonconforming loans

Axos Bank Mortgage has flexible underwriting standards. Axos can cater to borrowers who don't fit standard lender guidelines. Axos advertises "personalization for complex financial situations," as well as for properties that aren't owner-occupied.

Great for interest-only loans

Axos Bank Mortgage offers interest-only mortgages, which means borrowers can make interest-only payments on a loan for a set period. Interest-only mortgages aren't terribly common, but they can help keep your initial monthly payment low. With an interest-only mortgage, you typically have the flexibility to pay down principal (the original amount you borrow) if you choose. Interest-only mortgages aren't the best choice for everyone, but they can make sense in certain situations.

Unusually varied product selection

In addition to standard conforming loans, Axos Bank Mortgage offers VA and FHA mortgages, HELOCs, jumbo, and super jumbo loans. This lender also offers more nonconforming loan types than most other lenders. That includes investment property loans, mobile home park loans, mixed-use loans, and mortgages for foreign nationals. Axos also offers asset-based lending programs, and other harder-to-find mortgages.

Home equity options

Axos Bank Mortgage offers home equity loans and home equity lines of credit (HELOCs). A home equity loan is a fixed-rate loan, often referred to as a second mortgage. Home equity loans are not common when interest rates are very low. A HELOC is a credit line (typically with a variable rate) that you can draw money from as needed.

Refinancing

In addition to its extensive list of purchase mortgages, Axos Bank Mortgage also offers mortgage refinancing. A mortgage refi can help a borrower lower the interest rate, take cash out against equity, eliminate mortgage insurance, or a combination of the three.

Rate quote tool

Axos Bank has a handy mortgage rate quote tool on its website. You enter details like the purchase amount, your down payment amount, your credit score, and how you plan to use the property, and Axos will give you interest rates for 10, 15, 20, and 30-year fixed-rate loans. You'll also see how your decision to pay (or not pay) for mortgage points changes the mortgage rate. You can play around with the down payment size and credit score to see how those factors affect the cost of your loan. Note that you do need to enter an email address and phone number to use this tool.

What could be improved

Lender fees

Axos Bank Mortgage advertises a $0 lending fee. But it only applies to customers who meet certain conditions. If you don't have (or don't open) a checking account with the bank, you pay $995. If you have an account, but your mortgage is under $250,000, the fee is $795. So it's not a $0 lender fee for everyone.

In-person guidance

Axos is fully online. If you want in-person guidance in applying for a mortgage, Axos Bank Mortgage probably isn't the best option for you.

Customer support options

Axos has very limited live chat customer service for mortgage applicants. (Note: There is email support for borrowers experiencing COVID-19 financial hardship. A reply could take a few days) The best (and sometimes only) way to get help is to contact the bank by phone. In a nutshell, customer service isn't an Axos highlight.

USDA loans

Many lenders offer USDA mortgages, which allow buyers to get zero-down mortgages on properties in designated areas, usually rural. Axos Bank doesn't offer this loan type. If you're interested in the USDA rural financing program, you need to look elsewhere.

Alternatives to consider

There's no perfect mortgage lender for everyone and there are reasons you might want to consider an alternative.

If you value in-person advice, take a look at Bank of America. The bank has branch-based mortgage representatives across the U.S. It also offers a first-time home buyer loan with 3% down and no private mortgage insurance. Another perk is that some Bank of America customers will qualify for a mortgage rate discount. Merrill Lynch investment customers can pledge securities they own as a down payment instead of cash.

If you're refinancing, take a look at loanDepot. More than two-thirds of its loans are refinances. It offers a streamlined online process, plus an in-person branch network to accommodate customers who need face-to-face help.

How to qualify

Axos Bank's mortgage qualification process is 100% online. Customers can get a rate quote in just a few minutes. An Axos mortgage consultant walks you through the streamlined application and documentation process. Axos aims to close its mortgages within 30 days.

Because Axos specializes in nontraditional mortgages like jumbo and nonconforming loans, lending standards can vary significantly. Applications for specialized loans are evaluated individually.

Mortgage lenders, including Axos, look at your credit score, debt-to-income ratio, equity (or down payment), and available cash.

You'll need a 620 credit score to qualify for an FHA loan or VA loan from Axos Bank. For a conventional loan there is a little more flexibility under some circumstances. Specifically, if you apply with a co-applicant and your scores average at least 620, the borrower with a score below 620 might still be approved.

The available cash (or "cash reserves") requirement varies from one loan program to the next. Most loans require that you have enough money set aside to cover between one and 12 months of expenses. This money does not have to be in a savings account, though. It could be a vested retirement or insurance account, a trust, a certificate of deposit, or certain other types of accounts.

How are Axos Bank Mortgage refinance rates?

Axos Bank's refinance rates are competitive. They are generally in line with other major mortgage lenders, and slightly higher than Axos' purchase loan rates.

How are Axos Bank Mortgage rates compared to national averages?

Axos Bank's mortgage rates trend about the same as the national average. To see them, you need to use the tool on Axos' website. You'll answer basic questions about the loan, and after you provide contact information, you'll be shown rates you might qualify for. On the day we checked, the Axos Bank 30-year fixed-rate mortgage to purchase a primary residence clocked in at a few hundredths of a percent below the national average, with no points needed. Borrowers willing to pay 0.25% points can shave even more -- about one-eighth of a percent -- off their mortgage interest rate.

Axos Bank Mortgage is right for you if:

• You're an Axos Bank checking account customer, or are willing to become one. The cash back program is one of the most compelling incentives we've found.
• You need a jumbo mortgage (in excess of $647,200 in most parts of the country).
• You want an interest-only mortgage.
• You need a nonconforming loan.
• You are fine with a fully online process with minimal customer support.