State Farm’s banking and financial arm is State Farm Bank, a distinct business owned by the parent company. State Farm was founded in 1922 in Bloomington, Illinois. State Farm Bank began operations in 1999 and is still headquartered in Bloomington.
State Farm Mortgage Facts
- Founded in 1922 in Bloomington, Illinois, where it still has its main headquarters
- Primarily specialize in insurance, and the car insurance organization is the parent company of State Farm’s other businesses
- Provides basic banking and investment services alongside home loans, auto loans, mutual funds, and other offerings
- Options include fixed- and adjustable-rate mortgages in conforming and non-conforming configurations, as well as FHA loans and VA loans within the southeast U.S.
- Branches in Idaho and Washington have received A+ ratings from the Better Business Bureau
- Offers a wealth of online resources as well as online home loan center where potential borrowers can review the progress of their applications
Overview
State Farm’s banking and finance business, founded in 1999, leverages the nearly 100 years of operations its parent company has to raise awareness of its offerings. It serves all U.S. states, except Ohio, and Washington, D.C. State Farm does not appear on the Consumer Financial Protection Bureau’s list of mortgage providers with the highest number of originations. A lack of BBB accreditation and official ratings for the headquarters and many branches is also a concern.
However, its broad reach and supportive approach to lending and customer support are strong positives. Representatives are available via phone from 6 a.m. – 11 p.m., Central time, Monday through Friday and 8 a.m. – 8 p.m. on weekends and holidays. State Farm additionally offers a wide array of resources and information for potential and current borrowers, like current rate information, personalized loan calculators and guidance on buying and selling homes.
Current State Farm Mortgage Rates
State Farm Mortgage Specifics
Home loans offered by State Farm are generally traditional for the average customer, with conforming and non-conforming fixed- and adjustable-rate offerings available, alongside FHA loans and VA loans. The company is transparent about its mortgage rates, offering detailed information about its core loan products to all who are interested on its website. State Farm provides the opportunity to buy discount points at the onset of the loan for a lower interest rate.
Understanding the differences between the mortgage products made available by State Farm helps you identify the option that aligns best with your needs and goals. The choices you make in terms of a specific mortgage product can influence your chances of qualifying for a loan, so be sure to keep these details in mind as you move on in the process.
Fixed-rate mortgage: One of the significant benefits of a fixed-rate mortgage is its predictability. When you’re approved for a fixed-rate home loan by your lender, you can predict the majority of the cost going forward. Only ancillary considerations like insurance and property taxes can change the monthly payment. This is helpful to both managing a monthly budget and calculating the total lifetime cost of the loan. Remember that, due to how interest accrues, a shorter mortgage term will involve higher monthly payments but a lower total cost. A longer term leads to the opposite situation. If you plan to stay in this home for a significant period of time or don’t expect to see significant increases in your income, a fixed-rate loan can be an effective choice.
Adjustable-rate mortgage
Often abbreviated to ARM, this type of home loan has an interest rate that is set for an initial period of time as the loan begins, then changes after that period expires. ARMs are often beneficial at their onset because they can offer a lower interest rate than is available from other options. They also include a higher risk than a fixed-rate mortgage. The interest rate will go up or down after adjustment based on a variety of economic factors. Borrowers may face a reduced or increased payment for reasons tied to broader economic activity, which are generally out of their control. ARMs are especially useful when borrowers don’t plan to stay in the home tied to the loan for the long term or expect to pay off their loan in a relatively short period of time.
Jumbo mortgage: A jumbo mortgage exceeds the financial limits for conforming loans, which are established by the Federal Housing Finance Agency and backed by federal government-sponsored enterprises Fannie Mae and Freddie Mac. The 2019 baseline limit is $484,350, with larger loans allowed in areas where real estate prices are especially high. Jumbo home loans provide those interested in living in a large home an effective avenue to ownership. Due to the lack of federal guarantee for this type of loan, strong credit and assets that can be used as loan collateral are often important factors. Jumbo loans can be either fixed- or adjustable-rate mortgages, depending on the preference of the borrower and other factors.
FHA mortgage: The Federal Housing Administration backs this type of home loan. First-time homeowners often use it. There are other situations where this type of loan is applicable, such as for those who want to improve the energy efficiency of their home. Benefits of FHA loans include lowered minimum credit score requirements and down payment requirements. With a credit score of 580 or higher, borrowers only have to put 3.5 percent down.
VA mortgage: The Department of Veterans Affairs aims to facilitate homeownership among veterans of the armed services as well as active-duty service members and qualifying surviving spouses. With strict qualifying requirements, this type of loan has a limited audience. However, those who qualify enjoy a variety of benefits, including lower interest rates and reduced down payments.
State Farm Customer Experience
State Farm’s banking and finance operation has close to two decades of experience, offering a wide variety of accounts, investment vehicles, and loans to customers. Bank operations include a capable staff of in-house financial specialists who are in many cases supplemented by State Farm agents. The application process at State Farm begins with a phone or in-person conversation with a mortgage-licensed agent. The company offers an online mortgage center and allows applicants to track progress online. State Farm provides a variety of other informative articles, resources and interactive assets, including a personalized loan finder program and a buying vs. renting calculator.
State Farm does not appear on the J.D. Power Primary Mortgage Originator rankings. It is not among the companies listed in the Consumer Financial Protection Bureau’s complaint report. State Farm doesn’t list its average time to closing. Potential borrowers should keep the national time-to-close average of 41 days, calculated by Ellie Mae, in mind.
State Farm Lender Reputation
State Farm Bank offers a variety of banking and financial services, including home loans. Its headquarters is based in Bloomington, Illinois. It was founded in 1999. Its unique Nationwide Mortgage Licensing System ID number is 139716 and is a member of the FDIC and an Equal Housing Lender.
Many of its offices aren’t accredited or rated by the Better Business Bureau, but the few that are have A+ ratings. The headquarters location has an average consumer rating of just over 1/5 stars and 1,413 complaints closed in the previous three years. However, a significant majority of these complaints and ratings are tied to the company’s insurance offerings and do not provide insight into its home loan operations. It has no ratings on Trustpilot. The NMLS took two enforcement actions against State Farm Bank in December 2018, while the CFPB has no record of past actions.
- Information collected on Jan 28, 2019
State Farm Mortgage Qualifications
While State Farm makes a point to list rate information and other details about its home loans, it doesn’t make guidance about minimum credit scores, preferred debt-to-income ratios and other information readily available. Those interested in applying for a loan with State Farm can learn more by getting in touch with the company.
A basic understanding of credit scores is invaluable as you begin the process of seeking out a home loan. Keep the following information in mind as you consider your mortgage options. Generally, higher credit scores can lead to more favorable rates and terms, because mortgage lenders see such borrowers as having a lower level of risk. The opposite is generally true of lower scores. While many other factors are in play, your credit score is a critical element of securing a home loan.
|
Credit Score |
Category |
Likelihood of Approval |
|
760 or higher |
Excellent |
Very likely |
|
700-759 |
Good |
Likely |
|
621-699 |
Fair |
Somewhat likely |
|
0-620 |
Poor |
Somewhat unlikely |
|
None |
N/A |
Unlikely |
State Farm Phone Number and Additional Details
Homepage URL: https://www.statefarm.com/finances/
Company phone: 877-734-2265
Headquarters address: 1 State Farm Plaza, Bloomington, IL 61701
The post Current State Farm Mortgage Rates Reviews: Today’s Best Analysis appeared first on Good Financial Cents®.
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