The Yahoo view: Embrace Home Loans offers an astonishing array of affordable, low-down-payment mortgage options, but it needs to improve its interest rate transparency.

Embrace Home Loans is a national mortgage lender with licensed professionals ready to assist you in 48 states plus Washington, D.C. From cash-out refis and popular government-backed mortgages to zero-down-payment purchase options, you’ll be hard-pressed to find a lender offering a wider selection of mortgage types out there.

Some things we love? Embrace’s lending options cater to a wide range of credit scores and those with unconventional financial backgrounds — we’re talking about the self-employed and those with previous bankruptcies, short sales, and foreclosures. They also offer renovation and rehab loans so you can buy a fixer-upper and remodel it out of the gate.

Some things that leave us wanting more? Mortgage rates, for one. There isn’t a single real-time rate listed on Embrace’s website. Loan cost transparency could use some work too. But don’t worry — we’ll explain what we see (and don’t) so you can make a more informed lending decision.

Read more: What credit score do you need to buy a house?

Key benefits

• Interest rate buydown programs include lender-paid and seller-paid options that could decrease your mortgage rate for up to three years.

• Offers FHA, VA, and USDA loans — all affordable options, especially for first-time home buyers.

• Buyers with previous negative credit events could benefit from Embrace’s special financing programs for those at least 24 months past bankruptcy, foreclosure, modification, or short sale.

• Embrace makes a fixer-upper purchase accessible with FHA- and Fannie Mae-backed renovation and rehab loans.

• Both first-time and previous home buyers with credit scores of 660+ qualify for its zero-down mortgage program.

• Refinancing options include conventional rate-and-term, cash-out, and Fannie Mae- and Freddie Mac-backed loans for lower-income borrowers.

• Offers eight-month, interest-only bridge loans so current homeowners can buy a new home without a sale contingency (balloon payment applies).

• Some loans qualify for its Guaranteed On-Time Closing (GOTC) program, which could pay you $2,500 if Embrace misses your closing date.

• Borrowers can use Embrace’s rate float-down feature twice before closing on eligible loans to lower their rate if mortgage rates drop; each float-down costs 0.25 discount points.

Need to know

• Embrace doesn’t publish interest rates on its website, which is a real disadvantage for comparison shoppers.

• The company’s website doesn’t publish information about loan costs, which our research shows are high compared to other comparable lenders.

• Due to Embrace’s lack of rate and loan cost transparency, it is impossible to determine whether lending options for those with past credit issues are affordable without contacting a loan officer.

• This lender doesn’t offer home equity lending options like HELOCs and home equity loans.

• Embrace doesn’t offer home loans in Hawaii or Nevada.

Embrace Home Loans product offerings

Embrace Home Loans offers the following types of home loans:

• Conventional loans

• FHA loans

• VA loans

• USDA loans

• Purchase loans

• Refinance loans

• Cash-out refinance

• Fixed-rate mortgages

• Adjustable-rate mortgages

• Jumbo loans

• Bridge loans

• Second home loans

• Investment property loans

• Manufactured home loans

• Renovation loans

• 0% down loans

• Buydowns

• Condo/co-op/new construction loans

Embrace Home Loans does not offer the following types of home loans:

• Interest-only loans

• Lot loans

• Guest house/ADU loans

• Nonqualified loans

• Energy-efficient renovation loans

• Piggy-back loans

• ITIN mortgages

• Medical professional mortgages

• Construction loans

• HELOCs

• Home equity loans

Dig deeper: What is a bridge loan, and how does it work?

Embrace Home Loans for first-time home buyers

If you’re a first-time home buyer, grab a snack because there’s a lot to cover — and in the best way possible. No matter your credit situation, it's highly likely that you’ll find a mortgage option with Embrace that fits like a glove.

Government-backed mortgages

First, let’s chat about government-backed mortgage programs. Whether you’re a veteran looking for a VA loan or want the low-down-payment options a USDA loan offers, Embrace has you covered. If you’ve had your eye on a home that needs a bit of TLC, fantastic. Embrace’s Ready for Renovation loans include multiple FHA-backed 203(k) options, plus the HomeStyle renovation loan from Fannie Mae so you can get buying and get fixing all at once.

Additional low-down-payment options

Now, let’s talk affordability. Embrace’s mortgage offerings include a variety of loans and assistance programs that can get you into a home — and maybe for less than you might think. It offers HomeReady and Home Possible loans, which accept down payments as low as 3%. Embrace also offers a down payment assistance program to eligible borrowers in 32 states, meaning you could get into a home for as little as 0% down.

The caveat? Its zero-down program will lend up to 101%, so you can roll closing costs into your mortgage. However, that may require a second mortgage that comes with a balloon payment — a large amount of cash due in one lump sum down the line. Be sure to discuss this option in full with a loan officer so you understand how balloon payments work and your options for paying off or refinancing that second mortgage when it comes due.

Loans for unconventional borrowers

If you’re self-employed or have a credit history with a few dents and dings, Embrace welcomes you with open arms (pardon the pun).

Labeled as “unconventional loans” on its website navigation, these options cater to those who may have run into difficulty getting approved for a mortgage by other lenders. If you’re self-employed, you can use 1099s and bank statements to verify your income. Previous bankruptcy? Don’t worry. So long as you’re 24 months past your discharge date, Embrace is happy to take a look at your current finances to see if they can get you approved.

Affordable housing options

If you click on over to “proprietary programs” on the Embrace website under “programs,” you’ll eventually see a block that says “affordable housing.” When you click on it to learn more, things get funky. You’re taken to a website for the Wider Path Home Foundation — with absolutely zero explanation of its relationship to Embrace.

It took us some serious digging, but we found an explanation of Embrace’s … company culture page. Believe us — we’re as befuddled by that as you are. Wider Path appears to be an Embrace-founded nonprofit that offers resources for demographically disadvantaged home buyers. We can’t say what those resources really are, so Embrace has some work to do here.

Up Next

• Best mortgage lenders for first-time home buyers of October 2024

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• Falling mortgage rates, a recovering housing market — Is it a good time to buy a house?

Embrace Home Loans for FHA loan borrowers

Let’s go back to government-backed mortgages for a second. You’ll find multiple FHA-backed loan options at Embrace, including purchase and refinance options.

For purchase, you’ll find the standard FHA-backed mortgage. These loans have a low 3.5% down payment requirement and credit score requirements as low as 580. You can also cover your down payment requirement (and closing costs) with gift funds.

If you currently have an FHA loan and are looking to refinance, Embrace also offers the FHA Streamline Refinance program. With this option, you get to skip the credit check, appraisal, and income verification and roll into a new, cost-saving loan.

And, as we mentioned up above, Embrace offers the popular 203(k) FHA-backed loans. With the full 203(k), you can borrow up to 100% of a property’s value to remodel and repair a single-family home. The limited 203(k) is for existing homeowners and lets you borrow up to $50,000 to improve an existing property.

Learn more: The best FHA mortgage lenders

Embrace Home Loans for home equity lending

Admittedly, Embrace has limited options for home equity lending. They don’t offer home equity lines of credit (HELOCs) or home equity loans. The only way to make your home equity work for you at this company is to do a cash-out refinance. It’s possible that Embrace also offers FHA cash-out refinance programs since it’s heavy on FHA loan offerings, but the website isn’t clear. You’ll need to connect with a loan officer to know for certain.

Embrace home mortgage loan rates 2024

This is the part where we tell you how to find mortgage rates on the Embrace website and what those rates assume. Sadly, we cannot. Embrace doesn’t publish current interest rates on its mortgage products.

The only interest rates it makes publicly available are sample rates for refinancing — which don’t feel realistic — and we have some (a lot of) thoughts on those.

So, we know it’s been a minute since the early pandemic heyday when sub-3% mortgages were everywhere. As of the day we did our research, mortgage rates on a 30-year fixed were hovering a little below 6.5%. Those looking at a 15-year fixed-rate mortgage could score a rate of around 5.5%. While future rate cuts look likely, Embrace offers sample rates that don’t match today’s market conditions.

For example, Embrace offers a sample 3.13% APR on a $225,000 30-year fixed-rate cash-out refi loan with a 70% loan-to-value (LTV); for a 15-year, you’re looking at 3.07% APR.

The catch? You’ll need a credit score of at least 701 and to pony up two discount points at closing to buy your rate down. A point is generally equal to 0.25%, making two points 0.50%. Even with the discount points, if those sample refinance rates were real, we’d be refinancing our mortgages right now instead of writing this review.

But they’re not. Those rates don’t even compare with current refi rates, which are in the mid-5% to mid-6% range. Two points would only bring those rates down to the low 5% range at best. And even if they were realistic, you’d need to pay an additional $4,500 on a $225,000 mortgage at the closing table on top of any lender fees and closing costs to get them.

How Embrace Home Loans scores on mortgage rates and loan costs

At Yahoo Finance, we use 2023 Home Mortgage Disclosure Act data comprised of 10 million home loan applications to score mortgage lenders on issued mortgage rates and total loan costs. We score each lender on a scale of 1 (lowest) to 5 (highest).

For example, with mortgage rates, a lender with a lower score charged a higher-than-median mortgage interest rate for loans issued in 2023. A higher score would indicate a lender granted lower-than-median home loan interest rates to borrowers in 2023.

Regarding total home loan costs, a lower score would indicate that a lender charged higher than the median total home loan costs in 2023. A high rating would mean a mortgage lender offered lower than median all-in home loan costs in 2023.

Embrace home loan rates score: 4 out of 5 stars

Embrace total loan costs score: 2 out of 5 stars

What this means: Embrace Home Loans offered a lower-than-median mortgage rate of 6.49% but a relatively high total loan cost of $8,547.85 to borrowers in 2023.

Embrace Home Loans mortgage application

To apply for a mortgage with Embrace Home Loans, you just need to contact a loan officer or click “apply” on the website. That is if you can find the “apply” button. It’s buried under the menu under “more” in the main navigation. And yes, we’d like a word with Embrace’s web development team.

Once you’re in the application portal, you can provide your email and continue via desktop or download the company’s app. Either way, you can securely upload any required supporting documentation to get things rolling. They wanted our email address (which makes us twitchy), so we entered it in the interest of giving you more information. Then they wanted a whole lot of personal information. (Phone number? Nope!) So, we exited the process there.

Embrace Home Loans mortgage preapproval

Whew. It’s tough to say whether Embrace has a mortgage preapproval process because we looked (no joking) for an hour and couldn’t figure it out. If you do a web search for “Embrace Home Loans preapproval,” that sponsored ad just takes you to the company’s home page.

From inside the website, you can click on “get started.” That takes you to a popup that asks for some additional information, like property type, ZIP code, and price. To get any sort of rate quote, you have to provide your email address. So, if you’re looking to get a quote or preapproved with Embrace, know it might take some extra steps to complete.

Embrace Home Loans mortgage calculators and home-buying tools

While we might have been a bit hard on Embrace up to this point, that critical eye changed to love when we looked at their mortgage calculators and online buyer tools.

While we’d like to see a link to their mortgage resources in their main navigation, they’re easy enough to find under the website’s “more” menu. Just click “mortgage resources,” and you’ve got information at your fingertips. They offer four different mortgage calculators, a glossary filled with mortgage terms to help demystify industry jargon, an FAQ page filled with helpful answers, plus their Kitchen Table blog filled with hot topics on everything related to buying or refinancing a home.

Read more: How much house can you afford? Use our free home affordability calculator.

Embrace Home Loans pros and cons

Pros

• Embrace scores 5 out of 5 stars for Affordability due to its variety of mortgage options with low down payments, including a 0% down option.

• Embrace Home Loans earns an impressive rating of 4 for its plethora of online resources.

• According to Home Mortgage Disclosure Act data, Embrace has lower mortgage rates than the industry median.

Cons

• With no advertised mortgage rates, Embrace only scores a 1 for transparency.

• Embrace’s total loan costs are higher than those of many companies with similar products.

• Website navigation could use some improvements to be more home buyer-friendly.

How Embrace Home Loans compares to other mortgage lenders

Embrace Home Loans vs. Rocket Mortgage

Embrace and Rocket Mortgage offer similar loan options, but Rocket shines a bit brighter for a few reasons. Rocket is more transparent about rates and offers consumers an entire page dedicated to current rates on various products — including APR, points, and how much those points will cost you.

Rocket also has a 1% down payment option that fully explains how that loan works: You provide 1%, and Rocket kicks in the other 2% to equal the standard minimum 3% down payment. While Embrace’s 0% down option looks interesting, the website doesn’t offer details about how it works.

Rocket Mortgage review

Embrace Home Loans vs. Better Mortgage

First-time buyers will likely be better suited to Embrace Home Loans, which offers plenty of low-down-payment mortgage options. Better Mortgage offers more rate transparency than Embrace, but its quoted rates assume 20% down, which might make Better out of reach for many buyers.

As a plus in Better’s column, their website is ridiculously easy to navigate. They seem to focus on a truly digital mortgage experience, whereas Embrace’s website can be clumsy at times and focuses on getting consumers to connect directly with a loan officer.

Better Mortgage review

Embrace Home Loans FAQs

Is Embrace Home Loans real?

Absolutely. Embrace Home Loans offers various mortgage products for purchase and refinance. First-time buyers may also find that Embrace offers many affordable options with flexible or low down payments, including government-backed loans and the company’s proprietary 0% down option.

Is Embrace Home Loans a direct lender?

Embrace Home Loans is a direct lender for Freddie Mac and Fannie Mae and underwrites all its loans.

Who owns Embrace mortgage?

Embrace Home Loans was founded in 1983 by Dennis Hardiman under the name Advanced Financial Services. The company changed its name to Embrace Home Loans in 2009. Hardiman still acts as CEO of Embrace.

Methodology:

Yahoo Finance reviews and scores mortgage lenders with quintile scoring in five primary categories: 1) Interest rates. Using 2023 Home Mortgage Disclosure Act data comprised of 10 million home loan applications, we score mortgage lenders on issued mortgage rates below or above the annual median of reporting lenders. 2) Affordability. A measure of loan product availability and the willingness of a lender to offer government-backed loans, low down payments, down payment assistance, and consideration of nontraditional credit. 3) Loan costs. HMDA data is again analyzed, and lenders are rated based on total loan costs compared to the annual median. 4) Rate transparency. The ability of a website user to obtain a mortgage interest rate estimate. We score lenders based on whether rates are enhanced with discount points or high credit score requirements, disclaimers revealing rate assumptions, sample advertised rates, and whether adjustable or no discount point rate estimates are available. 5) Online features. An analysis of the educational material, calculators, and additional resources available to users.

Review of Nationwide Multistate Licensing System (NMLS) data on regulatory actions can trigger a penalty to the score of any lender with a consumer mortgage-related administrative or enforcement action within the past five years.

Advertisers or sponsorships do not influence ratings.

Editorial disclosure for mortgages:

The information in this article has not been reviewed or approved by any advertiser. The details on financial products, including interest rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the lender's website for the most current information. This site doesn't include all currently available offers.

This article was edited by Laura Grace Tarpley.