Rocket Mortgage Review
Run by Quicken Loans, Rocket Mortgage is one of the best online mortgage lenders. When you apply for a loan with Rocket Mortgage, you can select loan terms ranging from 8 to 30 years. The entire process can easily be completed online through the help of Rocket Mortgage’s top-notch customer service team. To get a more thorough Rocket Mortgage review, read on.
What Is Rocket Mortgage?
Rocket Mortgage is known for providing an online platform for loan shopping. Once you submit your application, underwriters will quickly work to approve your loan. The actual loan types are determined by Quicken Loans. Like many traditional lenders, you can find conventional loans with fixed and adjustable rates. You can also get government-backed mortgages like a United States Federal Housing Administration (FHA) loan or a United States Veterans Affairs (VA) loan.
Other than conventional loans and mortgages, you can also refinance your current home. Unfortunately, home equity lines of credit and home equity loans are not available through Rocket Mortgage. If you want a reverse mortgage, you will have to go to One Reverse Mortgage, which is affiliated with Quicken Loans.
Overview of Rocket Mortgage
Originally, Rocket Mortgage was created in 2015 by Quicken Loans. Like its parent company, it provides online mortgages. Currently, Quicken Loans and Rocket Mortgage are the top mortgage loan originators in the country. In addition, they are known for being the second-biggest lenders for VA and FHA loans.
People like going to Quicken Loans and Rocket Mortgage because of their online application process. While Rocket Mortgage generally has higher interest rates than its competitors, the mortgage application process is extremely convenient. Plus, many clients love the company’s customer service.
Pros and Cons
Like any loan company, there are some benefits and drawbacks to working with Rocket Mortgage. While online and phone customer service are always available, Rocket Mortgage does not have any brick-and-mortar storefronts that you can go to. Likewise, it does not have products like home equity lines of credit. Fortunately, the loan company generally makes up for these drawbacks in other ways.
- You can enjoy having a float-down rate lock.
- Rocket Mortgage offers excellent customer service online or via phone.
- The lender only requires a low down payment. Your down payment can be as low as 3 percent.
- You can access fixed-rate (FRM), VA, adjustable-rate (ARM), flexible-term, jumbo and FHA loans.
- Rocket Mortgage is an online lender, so there are no physical storefronts. If you need in-person assistance, you cannot go to a brick-and-mortar location.
- The lender does not offer a lot of details about its lender fees.
- Rocket Mortgage does not provide home equity lines of credit or home equity loans.
- The lender does not offer any United States Department of Agriculture (USDA) loans for low-income buyers.
Rates and Fees at Rocket Mortgage
When it comes to finding a lender, one of the most important factors is the loan’s cost. At Rocket Mortgage, the overall rates and fees are set by Quicken Loans. Compared to other lenders, Rocket Mortgage charges higher origination fees on average. Likewise, Rocket Mortgage’s mortgage rates are also slightly higher than average.
Sometimes, you can lower your mortgage rate by paying more upfront fees. Many lenders actually use this fact as a part of their marketing and pricing strategies. By charging higher upfront fees, lenders are able to charge a lower interest rate. In some cases, lenders just charge higher interest rates and higher fees.
Because of this, you really have to look closely at the mortgage company’s offering to see what you will actually be paying. If you want to reduce your mortgage rate, you can often buy discount points. To get these points, you just have to pay an added fee with your closing costs. Then, your interest rate is automatically decreased. If you plan on selling your home soon, these discount points may not be worth the cost. When you plan on living somewhere for a long time, the discount points could lead to significant savings.
Rates and Fees continued…
Our Rocket Mortgage review estimates your closing costs will be worth 3 to 6 percent of your total loan amount. If you get a loan for $500,000, your closing costs could be $15,000 to $30,0000. Likewise, a $100,000 loan will involve closing costs worth $3,000 to $6,000. In general, the percentage you pay is lower for larger loans. Additionally, you will have to pay a loan origination fee between 0.5 and 1 percent.
Unfortunately, Rocket Mortgage is not known for being particularly transparent about its current interest rates. If you want to see the prevailing mortgage rates, you have to go to the website for Quicken Loans. You can also create a Rocket Mortgage account to get a personalized rate, but the hard credit inquiry could impact your credit score.
Rocket Mortgage Review: Loan Types
At Rocket Mortgage, you can find some of the following loan types.
- FRMs: As the name suggests, these mortgages charge a fixed rate. While most companies offer 15-year or 30-year loans, Rocket Mortgage’s YOURGage lets you choose any term between 8 and 30 years.
- ARMs: This is another popular loan option because it is often more affordable than an FRM right away. Because these mortgages come with an adjustable rate, your rate can potentially go up in the future.
- VA loans: These loans are designed for veterans, surviving spouses and current service members. With a VA loan, you can typically get a lower credit requirement and no down payment. They also allow you to avoid continuing mortgage insurance payments.
- Jumbo loans: These loans are designed for expensive properties, and they allow you to borrow up to $3 million.
- FHA loans: FHA loans have a low down payment of just 3.5 percent. While they have a high monthly mortgage insurance payment, they are a decent option for borrowers who have imperfect credit.
Rocket Mortgage Review: How Refinancing Works
If you want to refinance your current mortgage, Rocket Mortgage can help. This company offers programs like FHA Streamline and VA IRRRL. You can also get a cash-out refinance for purposes like debt consolidation and home improvements.
Like other lenders, Rocket Mortgage will look at your credit report, income, assets and debt-to-income ratio to see if you are eligible for a mortgage loan. In general, you will need a credit score of 620 to get approved. Unless you are getting a VA loan, you will also need a down payment of at least 3 percent.
If you have a credit score that is lower than 620, you may still be able to get an FHA loan in certain circumstances. Someone with a credit score between 500 and 580 can get an FHA loan with a 10 percent down payment. To find out if you are eligible, you can talk to Rocket Mortgage.
To qualify for a loan, you have to submit financial documents that prove your income, assets and debt-to-income ratio. You will need to submit your W2s, bank statements and pay stubs. If you have retirement accounts, you may also have to submit proof of your IRA or 401(k) balance.
The Loan Process
Next, our Rocket Mortgage review looked at the loan process. Because it is an online lender, Rocket Mortgage conducts its entire lending process online. You will either respond to the company’s questions online or over the phone. If you need help, you can always reach out to the company. Since the process is fairly straightforward, you could easily complete the entire application without ever talking to an actual person.
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About Ben Broadwater
Ben Broadwater is the Director of Investment U. He has more than 15 years of content creation experience. He has worked and written for numerous companies in the financial publishing space, including Charles Street Research, The Oxford Club and now Investment U. When Ben isn’t busy running Investment U, you can usually find him with a pair of drumsticks or a guitar in his hand.