Selecting the right mortgage can be an overwhelming experience, with so many lenders competing for a borrower's business. The decision becomes even more complicated when you consider the plethora of mortgage products available. Purchasing a mortgage is often a life-changing experience, so a prudent first step in the process is to thoroughly review a selection of providers and their products. The following is a review of Stonegate Mortgage Corp. (NYSE: SGM), a niche financial company that operates as an intermediary. Its principal activities are originating mortgages, selling mortgages to investors and servicing loans to customers in the United States.

Who They Are

Stonegate Mortgage was founded in 2005, intending to become a leading provider in the emerging housing finance market. The Indianapolis company attempts to differentiate itself from competitors by providing outstanding customer service, operational efficiency and state-of-the art technology. It specializes in agency and non-agency residential mortgages through its distribution channel of retail outlets and third-party originators. The company had a market capitalization of $144.47 million, as of May 4, 2016.

Mortgage Products Offered

Stonegate Mortgage primary loan products include conventional loans, Federal Housing Administration (FHA) loans, Veteran Affairs (VA) loans, United States Department of Agriculture (USDA) loans and non-agency high-balance loans.

The company offers conventional mortgages with 30-, 25-, 20- or 15-year term fixed interest rates. It provides adjustable-rate mortgages in terms of three, five and seven years. Origination of the loan requires a down payment of 20%. These products are suitable for customers who prefer consistent loan payments.

FHA loans are guaranteed by the Federal Housing Authority and the federal government. Stonegate Mortgage offers 30-, 25-, 20- and 15-year terms that are available with fixed rates. Three- and five-year adjustable-rate mortgages are also available. Benefits of FHA loans include low down payments and closing costs, as well as less stringent qualification requirements.

VA loans are guaranteed by the Department of Veterans Affairs. This product is open to veterans, military personnel or a surviving spouse. Stonegate Mortgage offers 30-, 20- and 15-year fixed-rate loans, and three- and five-year adjustable-rate loans. Advantages of these loans include no down payments and competitive rates.

A USDA loan is available from the United States Department of Agriculture for those wishing to purchase rural properties. Features of the loan include no down payment and flexible credit requirements.

Non-agency high-balance loans are ideal for customers wanting to borrow between $250,000 and $5,000,000. Stonegate Mortgage offers 30- and 15-year fixed-rate loans, and 5/1, 7/1 and 10/1 adjustable-rate loans. The loans offer flexibility in rates and terms.

Additionally, the company offers customers a variety of refinancing options.

Mortgage Rates

As of May 4, 2016, Stonegate Mortgage offered a 30-year conventional loan at an interest rate of 3.75% and an annual percentage rate (APR) of 3.187%. The 15-year conventional loan carries an interest rate of 2.99% with an APR of 3.104%, while a 30-year FHA loan comes with an interest rate of 3.375% and an APR of 4.217%. Thirty-year VA loans are available at an interest rate of 3.375% with an APR of 3.616%. The 30-year USDA loan offers an interest rate of 3.375% with an APR of 4.051%. Non-agency high-balance loans carry a comparably higher interest rate of 4.25% with an APR of 4.287%. Each loan product has an associated lending cost of $1,095.

What Consumers Are Saying

The Better Business Bureau gives Stonegate Mortgage a 3.7 out of a possible five-star rating. The rating is independent of customer reviews. The ten customer reviews on the organization's website, as of May 2016, reported a negative experience. The reviews have a common theme of inadequate customer service and difficulties in payment processing.

Stonegate Mortgage receives a 3.6 out of a possible five-star rating from customer reviews on LendingTree Inc. (NASDAQ: TREE), an online platform that connects consumers and lenders. The 17 reviews show a mixed response. Negative reviews focus on select offices that are disorganized when responding to customer requests. Positive reviews of the company refer to knowledgeable and helpful representatives.

SunTrust Mortgage Overview (STI)

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