Rocket Mortgage Review: Fast Funding, Low Rates

Rock Mortgage Pros and Cons

Pros:

• 100% digital process
• Highly rated customer service
• A large selection of loan options
• Flexible underwriting requirements
• Easy to upload and retrieve documents

Cons:

• No opportunities for in-person consultations
• It’s a hard inquiry to check your rate
• Limited loan options if you have a unique situation

Rocket Mortgage Loan Types and Products

Rocket Mortgage offers the same loan types and products as your typical non-bank lender, including:

• Conventional fixed-rate mortgages – Conventional loans aren’t government-backed, and so they have stricter qualifying requirements. You’ll need better than average credit and low debt-to-income ratios to qualify. The fixed-rate mortgage has one interest rate for the life of the loan, which makes budgeting much easier.
• Conventional adjustable-rate mortgages – If you’d prefer an ARM loan because you want to take advantage of the lower introductory rates or buy a home for a short period, an ARM loan may save you some money. Just like the conventional fixed-rate loan, you need good credit and a low debt-to-income ratio. Unlike the fixed-rate mortgage, though, your interest rate can change annually after the introductory period, usually 1 to 5 years.
• FHA loans – If you have less than perfect credit or a higher debt-to-income ratio, the FHA loan may be a better option. This government-backed loan has more flexible guidelines and requires mortgage insurance for the life of the loan. You’ll need just 3.5% down and can qualify even with a few ‘blips’ in your credit.
• VA loans – If you are a veteran of the military, Reserves, or National Guard, you may be eligible for a flexible and low-cost mortgage program. The VA loan requires no down payment and has minimal qualifying requirements. Veterans don’t even pay mortgage insurance on a loan they don’t make a down payment on.
• Jumbo loans – If you need to borrow over $548,250, you exceed a conforming or conventional loan limit. But don’t worry, Rocket Mortgage also works with jumbo loan borrowers, offering loans up to $3 million if you can prove you can afford the payments.

Please note, Rocket Mortgage doesn’t offer home equity loans, home equity lines of credit (HELOCs), USDA Loans, or reverse mortgages at this time.

Rocket Mortgage Rates

Like any mortgage lender, the mortgage rates Rocket Mortgage offers vary by person. To get an idea of what they are offering on a specific day, head to Quicken Loans’ website to see what rates they’re offering.

Remember, though, the rates you see advertised online aren’t what you may get. That’s the starting point for most interest rates.

Rocket Mortgage adjusts the rates based on your qualifying factors, risk factors, and the profit they want to make on the loan.

Don’t take the rates you find at face value. If you want a true estimate of what they’ll charge you, create a Rocket Mortgage account and provide details about your qualifying factors.

Only do this when you’re ready to apply for a mortgage, though, since they’ll pull your credit, resulting in a hard credit inquiry on your credit report.

Rocket Mortgage Fees and Terms

Like any lender, Rocket Mortgage charges lender fees. This is how lenders cover the cost of originating and processing your loan.

It’s important to find the balance between paying mortgage fees and choosing the right interest rate. I always recommend that borrowers look at the bottom line – how much does the loan cost over its entirety, not just monthly?

For example, look at only the interest rate, asking for the lowest rate possible, and ignore the high origination fees charged. The loan may be more expensive than you realized over its entire term.

Rocket Mortgage, like most mortgage lenders, charges different upfront fees:

• Origination fee – Lenders charge this fee if you have a difficult loan situation or they feel your loan is risky. They’ll quote the origination fee with your interest rate, so you know the loan’s cost.
• Discount fee – This is an optional fee. If you want to ‘buy your rate down,’ you can ask to pay discount fees, which is prepaid interest. This means the lender makes the same amount of money, but you pay some interest upfront rather than monthly.

How Does Rocket Mortgage Work?

Here’s where Rocket Mortgage really differs. If you love digital processes and minimal human interaction, you’ll love it.

If you like hand-holding and talking to someone daily about your loan updates, you may not like it as much.

Here’s how it works.

Get Pre-Approved

Getting pre-approved is important (and almost necessary) for most homebuyers. Even if you’re refinancing, knowing the rate and fees Rocket Mortgage will provide is important.

To get pre-approved, you’ll answer a series of questions and provide proof of your finances, including your paystubs, tax returns, bank statements, and proof of current debts.

Provide Supporting Documentation

Every situation requires different documentation and/or eligibility requirements. Rocket Mortgage has several loan programs and some leniency with the guidelines based on the factors you present.

The digital program will alert you if Rocket Mortgage needs further information to process your loan.

Contact a Home Advisor (optional)

If you’re comfortable dealing with a completely digital process, you can. You never have to talk to a home advisor if you don’t want to. But, if you have questions, are confused, or need some guidance, you can contact a specialist.

How to Qualify for a Rocket Mortgage

Because Rocket Mortgage offers so many loan options, qualifying depends on the mortgage you want. On average, expect these guidelines:

• Minimum 620 credit score for conventional loans and 580 for FHA loans
• Maximum 43% debt-to-income ratio unless you have compensating factors like great credit, then they can go to 50%
• Stable income and employment for the last 2 years
• No recent bankruptcies or foreclosures
• Proof you’ll occupy the property as your primary residence if you’re applying for an FHA or VA loan

Rocket Mortgage Features and Benefits

Easily Apply Online

Applying for a mortgage is stressful, but Rocket Mortgage makes it easy. You complete the application in the privacy of your own home and on your own time.

You don’t have to talk to anyone – you just follow the prompts, answering the questions, and providing the documentation they request.

Unbeatable Customer Service

Rocket Mortgage has topped the customer service ratings for J.D. Power for 11 years+. Even if they don’t offer the lowest interest rates, the level of customer service often makes up for the slightly higher rates.

Customers love the level of customer service they receive during the application process (when they request it) as well as after they close.

A mortgage is a big commitment, so knowing you have a good lender on your side is reassuring.

Low Down Payment Options

You can get a loan with as little as 0% down if you are a veteran or 3 – 3.5% down if you need an FHA or conventional loan.

They don’t ‘penalize’ you if you only make a small down payment, making it much easier for renters to become homebuyers because they don’t need a large 20% down payment.

Fast Funding Times

Because Rocket Mortgage is the lender and servicer, loans fund fast. You don’t have to wait for a third-party bank to get their act together to be able to close on your loan.

Once you have a clear to close because you cleared all your stipulations, you’re ready to close, and Rocket Mortgage is ready to fund your loan.

High Debt-to-Income Ratios Still Considered

Rocket Mortgage uses a commonsense approach to underwriting. They don’t automatically turn down low credit scores or high debt ratios.

They look at the big picture. Can you afford the loan? Do you have a high debt ratio but can keep up with your bills?

They look at the factors of each application to ensure the loan you’re applying for fits within what you can comfortably afford without putting you over the edge.

But they don’t use rock-solid numbers that don’t look at your true ability to afford a loan.

Rocket Mortgage Pre-Approval Process

Before you look at homes, you should get pre-approved, and Rocket Mortgage makes it easy. You answer their simple questions, complete the loan application, and provide the supporting documentation.

Most borrowers must provide:

• 30 days of paystubs
• 2 years of tax returns
• 2 months of bank statements
• Proof of employment

Rocket Mortgage will underwrite your loan, asking for any more documentation they need to approve your request for financing.

Once approved, they will write a pre-approval letter. This letter shows lenders and real estate agents you are qualified to borrow money to buy a home.

The final approval relies on the value of the home you choose and its title (a clear title is required to close).

Refinancing with Rocket Mortgage

Rocket Mortgage offers several refinancing options. The process is just as easy as a purchase loan, but when you’re refinancing your mortgage, you have more options.

• Rate/term Refinance – Anyone can apply for a rate/term refinance, which can help you get a lower interest rate or better term. It’s commonly used by borrowers with an adjustable-rate loan who want to refinance into a fixed-rate loan.
• Cash-out Refinance – If you owe much less than your home’s value, you may tap into the equity, taking the cash out for other purposes. Some borrowers use the funds to renovate their homes, pay off debt, or send their kids to college.
• Streamline Refinance – If you have a VA or FHA loan and just want to take advantage of lower interest rates, you may qualify for a streamline refinance. This means you don’t have to prove many of your qualifying factors as long as you made your mortgage payments on time for the last 12 months.

How Does Rocket Mortgage Compare to Other Lenders?

#1. Rocket Mortgage vs. Better Mortgage

Better Mortgage also offers an online loan process. But they also claim to offer the lowest rates and fees in the industry.

Better Mortgage doesn’t charge any origination fees, offers fixed and adjustable-rate loans and both conventional and government-backed loan options.

If you have unique qualifying circumstances, though, you should look elsewhere. Better Mortgage focuses on conventional loan borrowers, and they are just now dabbling in FHA loans with a promise to add VA loans to their lineup soon.

>> More: Better Mortgage Review 

#2. LoanDepot vs. Rocket Mortgage

LoanDepot also cornered the market with an online mortgage loan process. They do offer in-person support at its 200+ locations, too, though.

LoanDepot claims they have the fastest closing process, closing 50% faster than most other lenders. Like Rocket Mortgage, LoanDepot offers many loans, including conventional, jumbo, FHA, and VA loans for purchase and refinance.

>> More: LoanDepot Mortgage Review 

#3. Guild Mortgages vs. Rocket Mortgage

Guild Mortgage is a west coast mortgage company with in-person and digital opportunities for borrowers.

They promise a 17-day closing but typically have interest rates higher than Rocket Mortgage. Guild Mortgage isn’t as transparent as Rocket Mortgage on its website, forcing you to talk to someone to get the true details of your loan options.

>> More: Guild Mortgage Review

How Do Rocket Mortgage Rates Compare to the National Average?

Rocket Mortgage’s rates are about the same as the national average. While you may not save money on interest rates by using them, their digital process that makes securing a mortgage easier and faster can be worth much more than a lower interest rate.

Is Rocket Mortgage a Good Choice for Mortgages?

Like any lender, choosing Rocket Mortgage is a personal decision. It can be a great option if you’re comfortable with a mostly online process and managing the stipulations yourself. The fact that they underwrite, fund, and service their loans makes it much easier and more convenient to manage your loans.

What Types of Mortgages Does Rocket Mortgage Offer?

Rocket Mortgage offers a wide selection of loans, including conventional, FHA, VA, and jumbo loans. There’s a loan for most borrowers unless you have a unique situation and need a subprime loan or want a home equity loan since they don’t provide those.

Does Rocket Mortgage Offer Mortgage Refinance?

Yes, you can buy a home or refinance an existing mortgage using Rocket Mortgage. The digital process makes it easy to take advantage of lower interest rates without the hassle of shopping around with different lenders.

Is it Safe to Use Rocket Mortgages?

As is the case with any financial company, always use caution. Rocket Mortgage uses bank-level encryption, but you should always protect your data, only accessing your account on your home Wi-Fi versus a public internet connection.

What Credit Score Do You Need to Qualify for Rocket Mortgages?

Most borrowers need at least a 620-credit score for a conforming loan and a 580 score for an FHA loan. However, Rocket Mortgage has flexible guidelines and will allow compensating factors to make up for a low credit score.

Where Is Rocket Mortgage Available?

You can currently use Rocket Mortgage in all 50 states and the District of Columbia. It’s not available in Puerto Rico or outside of the United States.

Who Is Rocket Mortgage Best For?

If you’re comfortable with online processes, Rocket Mortgage is a great fit. If you think you have unique circumstances or you don’t understand the mortgage process, though, you may want a more personal approach working with a lender and loan officer face-to-face.

Bottom Line: Rocket Mortgage Review 

If you treasure good customer service, like working digitally, and want a fast process, Rocket Mortgage could be a great option.

Even if you need personal help, you can contact a home advisor. It comes down to the rates and fees you’ll pay and if you qualify for the mortgage selection Rocket Mortgage offers.