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Axos Bank (formerly known as Bank of Internet) is a fully online financial institution, offering a variety of deposit and loan products. Mortgages have been Axos' focus in lending, and the bank offers some unique mortgage products, particularly for high-balance loans and buyers who don't meet traditional underwriting standards.
In this Axos Bank Mortgage review, we'll dig into its mortgage offerings and the pros and cons of its platform so you can decide if it's worth considering for your next home purchase or refinancing.
Axos Bank Mortgage
No lender fees for existing customers, along with a full online experience make it a top pick. One of the rare lenders to offer loans up to $25mm.
No lender fee: Unlike many other lenders, Axos offers mortgages with a $0 lender fee. To be clear, the bank has a standard $995 lender fee, but this can be waived if the new mortgage is for $250,000 or more and the customer has an Axos Bank checking account (you can open one during the application process). For account holders who need a mortgage under $250,000, the fee can't be waived, but can be reduced by $200.
Cashback credit: This is a big differentiator between Axos and its competition. Axos offers borrowers an annualized 3% cashback credit on their mortgage payments (principal and interest) to a maximum of $1,200 annually, subject to maintaining a minimum average daily balance in their Total Loan Rewards Axos checking account.
Fully online process: Axos Bank allows customers to complete the entire mortgage process online, in a very streamlined manner. You can apply for a mortgage, upload documents, and check your loan status throughout the process, entirely online.
Great for jumbo loans: Axos Bank specializes in jumbo mortgages, which are loans that exceed the limits set by Fannie Mae and Freddie Mac. In fact, virtually all of Axos' single-family loans on its balance sheet are jumbo loans. Axos offers jumbo and "super jumbo" mortgages of as much as $25 million (or more in some cases) with as much as 90% LTV (Loan-to-Value).
Great for non-conforming loans: Axos has flexible underwriting standards when it comes to loans that either exceed the limits set by Fannie Mae and Freddie Mac, or otherwise don't fit the standard lender guidelines. Axos specifically advertises "personalization for complex financial situations" as well as for properties that aren't owner-occupied.
Interest-only loans available: Axos offers interest-only mortgages that allow borrowers to choose to only make interest payments on their loan for a set period. Interest-only mortgages aren't terribly common, but can help keep your initial monthly payment low while allowing the flexibility to pay down principal if you choose. Interest-only mortgages aren't the best choice for everyone, but they can make sense in certain situations.
Lots of loan types: In addition to standard conforming loans, Axos offers VA and FHA mortgages, HELOCs, jumbo and super jumbo loans, non-conforming loans, and a proprietary HomeReady Loan for low- to moderate-income borrowers. Axos offers both fixed- and adjustable-rate structures, as well as interest-only mortgages, asset-based lending programs, and more.
Home equity loans: Axos Bank offers both home equity loans and home equity lines of credit (HELOCs). The former isn't terribly common these days. A home equity loan is a fixed-rate term loan, and is often referred to as a second mortgage. On the other hand, a HELOC is a credit line (typically with a variable rate) that you can choose to draw money from as needed.
Refinancing: In addition to its extensive list of purchase mortgages, Axos also offers refinancing. This can help people lower their interest rate, take cash out of their equity, eliminate mortgage insurance, or a combination of the three.
Lender fees: Axos advertises a $0 lending fee, but as discussed earlier, it only applies to customers who meet certain conditions. If you don't have (or open) a checking account with the bank, your lender fee is $995. And if you do have an account, but your mortgage is less than $250,000, the fee drops by $200. So, it's not a $0 lender fee for everyone.
In-person guidance: Axos is a fully online bank, so if you want in-person guidance when it comes to applying for a mortgage, Axos probably isn't the best option for you.
Customer support options: Unlike many other online banks, Axos doesn't provide live chat or email customer service for mortgage applicants. (Note: There is email support for borrowers experiencing COVID-19 financial hardship.) The only way to reliably contact the bank is by phone. In a nutshell, customer service isn't an Axos highlight, so if it's important to you, Axos may not be the best choice.
USDA loans: Many lenders offer USDA mortgages, which allow buyers the opportunity to get a 0%-down mortgage on properties in certain rural areas. Axos Bank doesn't offer this type of loan, so if you're interested in taking advantage of the USDA rural financing program, you should consider an institution that offers it.
Axos Bank's mortgage qualification process is 100% online. Customers can get a rate quote in just a few minutes, and an Axos mortgage consultant will walk you through the application and documentation process. The process is very streamlined, and Axos aims to close its mortgages within 30 days.
Because Axos specializes in non-traditional mortgages like jumbo and non-conforming loans, lending standards can vary significantly, and applications for specialized loans are evaluated on a case-by-case basis.
There's no perfect mortgage lender for everyone, and although Axos Bank has some excellent qualities, there are some reasons why you might want to consider an alternative.
For example, if you value in-person advice, you may want to take a look at Bank of America for your mortgage needs. Not only does the bank have branch-based mortgage representatives all around the U.S., it offers a first-time homebuyer loan with 3% down and no PMI and also has discounts for existing Bank of America customers. Additionally, Merrill Lynch investment customers can pledge securities they own as a down payment instead of cash.
If you're refinancing, you might want to take a closer look at LoanDepot. More than two-thirds of its loans are refinancing, and it has a streamlined online process, plus an in-person branch network to accommodate customers who may need face-to-face help as well.
As a final thought, it's worth mentioning that if you are in the market for a mortgage, you shouldn't simply apply at one lender and accept the loan you're offered, no matter how attractive their loan products seem. You should apply with a minimum of two or three lenders to compare offers. Even a seemingly small difference in interest rates can save you thousands throughout the term of your loan.
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