The Yahoo view: An OG in the online mortgage industry, Rocket Mortgage is a good choice for borrowers who appreciate a digital application and loan process — and a 1% down payment option.
Rocket Mortgage has been a massive marketing machine ever since its 2016 Super Bowl “Push Button, Get Mortgage” TV ad launched the online mortgage lender into orbit. It literally changed the way borrowers thought about how to get a home loan.
However, subsequent aggressive promotional campaigns have seen the lender splash down in hot water more than once. Yet, Rocket remains a leading loan volume mortgage lender nearly a decade later.
Here’s what you’ll want to know before you get on board with Rocket.
Dig deeper: Best mortgage lenders for first-time home buyers
Key benefits
Offers a 1% down mortgage called One+ that provides a grant of 2% of the home’s purchase price toward the down payment, up to $2,000. Maximum benefit is limited to $7,000 on a loan no greater than $350,000. Borrowers must prove the ability to make a 3% down payment and have a credit score of 620 or higher. Income limits apply.
Provides up to a $7,500 grant toward the down payment and closing costs for eligible first-time home buyers in 21 US metro areas.
Home buyers who purchase a home through its partner company Rocket Homes can earn a closing costs credit of 1.25%, up to $10,000 on a loan financed by Rocket Mortgage.
Need to know
Incentive programs such as the One+ mortgage will likely increase your interest rate.
Rocket Mortgage ranks third in customer satisfaction among home loan lenders, according to the latest J.D. Power Mortgage Origination Satisfaction Study.
Rocket also earns high marks in satisfaction for mortgage servicing — the collection of loan payments from borrowers and dispersing the funds to third parties.
Dig deeper: What all the best mortgage lenders have in common
Rocket Mortgage for first-time home buyers
Talk about eye-catching marketing. Rocket’s One+ mortgage is a headline-making 1% down payment loan to attract first-time home buyers. The program requires that you have the money in the bank for 3% down but will chip in 2% of the total to income-qualifying borrowers.
There are also grants available to buyers in specific metro areas, and the usual slate of 3% down conventional loans, as well as FHA and VA loans.
Learn more: See Rocket in Yahoo’s list of best lenders for first-time home buyers
Rocket for home equity lending
The longer mortgage rates stay elevated, the more popular tapping the locked-in value of a home will get. Rocket doesn’t offer home equity lines of credit but does offer fixed-rate home equity loans — and the currently out-of-favor cash-out refinance.
Few homeowners are likely to refinance their low-rate mortgage for a higher-rate loan, no matter how much cash they might get. Home equity loans are a second mortgage that can better serve the purpose.
Rocket mortgage rates
On the day we checked out their rates page, Rocket showed a handful of fixed-rate loans with two or more discount points to lower the rates. The disclaimer revealed the rate assumptions to include a whopping 40% down payment (30% on jumbos), a credit score of 740, and a debt-to-income ratio of less than 43%.
You might get a better idea of a ballpark mortgage rate by clicking on the “Estimate My Rate” button, but it will take more than a dozen steps and require your contact information to see the results.
Read more: How to get the lowest mortgage rates
Applying for a mortgage with Rocket
Rocket says you can complete an initial application and “get loan options in as little as 7 minutes.” It also notes that this is not a completely automated effort. You must “customize your loan and wrap up your application with a quick online chat or call.”
Dig deeper: How to get a mortgage in 2024
Rocket home buyer tools and calculators
For the prospective home buyer, Rocket has hundreds of articles detailing the home search, purchase, and finance process. A Learning Center features even more articles and seven calculators that provide rent versus buy, affordability, monthly payment, refinance, and equity access results.
Dig deeper: How much house can I afford?
Using the “land and expand” strategy of snagging a customer for one service and then offering others, Rocket is looking to get deeper into your wallet. Not only does it offer mortgages, but it also offers real estate services, a personal finance app, a credit card, and personal loans. When we got really deep into the website, we even found a car and truck marketplace called Rocket Auto. Who knew?
Rocket Homes works with the mortgage lending department and offers title search and insurance, settlement services, and affiliated real estate agents. The more services you use, the more closing credits and rebates you may qualify for to apply for a loan.
A chat feature looked promising but turned out to be AI-generated. It wouldn’t directly answer the simple question of “Does Rocket have HELOCs?” without requiring answers to several questions — including our phone number. We bailed.
Rocket regulatory issues
As we mentioned up top, Rocket has always been an aggressive marketer. Occasionally, it may have overstepped advertising boundaries — at least some regulators think so. Rocket has not admitted or denied such charges.
In a 2021 settlement shared by a dozen states, the company agreed to abide by federal laws regarding advertising standards related to marketed interest rates and the disclosure of applied discount points and other borrower assumptions. The issues were related to pitches used in material distributed by sales representatives on Rocket’s website and in direct mail and email.
Rocket for a cause
We enjoy recognizing lenders with social agendas, and something we learned about in our investigation was the Rocket Community Fund. It’s a Rocket partnership with some 90 communities that work to end homelessness. Grants are issued to organizations with initiatives tied to housing, education, and employment.
Rocket claims the effort has housed over 139,000 people since 2015.
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