LoanDepot Mortgage Review 2022

Customer Experience

LoanDepot is a California-based mortgage lender established in 2010. They offer a pretty comprehensive list of loan product options, though they do not offer a Home Equity loan or Home Equity Line of Credit product. They do offer Fannie Mae Homestyle Renovation loans for those homes that could use some work. Their loan officers can answer your questions and recommend loan products that would suit you best.

LoanDepot utilizes their proprietary Mello smart form online platform, which can handle a customer’s entire digital experience from application to closing. This technology used to be what their team used behind-the-scenes but they made improvements and gave access to the public to be able to handle much of the mortgage process themselves.

Borrowers who don’t want a fully-online process will be glad to know that they have the option to seek in-person assistance at any of about 200 LoanDepot physical retail locations across the U.S.

LoanDepot would also like to keep you as a customer and offers to waive lender fees for their existing customers that are refinancing with them. They also offer the Grand Slam Package, which offers up to $7,000 back at closing if you work with one of their affiliated agents and meet some other criteria, which should be confirmed with your loan officer.

loanDepot Loan Types

LoanDepot offers a wide range of loan products, including conventional, Jumbo, Veteran Affairs (VA), and Federal Housing Administration (FHA) loans, with fixed and adjustable rates. With its FHA 203(k) fixer-upper loan, you can finance the cost of your home along with renovation costs. If you’re looking to refinance your current mortgage, LoanDepot offers a cash-out refinance and a rate-and-term refinance. Notably, the lender doesn’t issue USDA loans, but it’s set to launch its all-digital Mello HELOC loan product. Here is a brief overview of these loans:

Purchase Loans

Conventional Loans

Offered by private lenders like LoanDepot, conventional loans aren't directly backed by the federal government, but most conform to the guidelines set by Freddie Mac and Fannie Mae. Generally, conventional loans have more stringent underwriting guidelines than FHA and VA- backed loans. LoanDepot’s most popular home program is the 30-year fixed-rate mortgage. LoanDepot also issues fixed-rate home mortgages with 10-year, 15-year, and 20-year terms.

In addition to fixed-rate mortgages, LoanDepot offers adjustable rate mortgages (ARM) with an initial fixed-rate period of 3,5,7, or 10 years before the rate adjusts yearly thereafter. Once your ARM enters its adjustable-rate period, LoanDepot sets interest rate caps that limit the maximum amount your rate can increase at the end of each adjustment period and over your loan term. If you don't intend to stay in a home for the long term, an ARM may suit your needs.

Here are the requirements for a conventional loan with LoanDepot:

• An initial minimum down payment of 5%. However, if you want to avoid private mortgage insurance, you’ll need a minimum down payment of 20%.

• LoanDepot doesn’t publish its credit score requirement. However, like most lenders, you may need a minimum credit score of 620.

• A Debt-to-income ratio(DTI) of not higher than 43%. Depending on your financial circumstances, the DTI ratio can sometimes go up to 50%.

Federal Housing Administration (FHA) Loans

As an approved FHA lender, LoanDepot issues flexible and more attainable fixed-rate FHA loans with 15 and 30 year loan terms. Here are the requirements:

• An initial 3.5% down payment for a minimum FICO score of 580. You'll need a 10% down payment if your FICO score is between 500 and 579

• Be a US citizen with a valid social security number

• Maintain a steady employment history that demonstrates adequate income

• Use the loan to purchase a 1-4 unit home, a condominium, a mobile, or a manufactured home as your primary residence

• A debt-to-income ratio of less than 43%

With a 3.5% down payment, you could also qualify for an FHA 203(k) loan that not only funds the price of your home but also includes renovation costs. However, you’ll need a minimum credit score of 620. FHA 203(k) renovation funds are usually held in escrow and released to contractors at different milestones.

VA Loan

Backed by the Veterans Department of affairs, LoanDepot’s VA loan allows eligible service members, veterans, and qualified surviving spouses to borrow with zero down payment. LoanDepot’s VA loans come in adjustable and fixed rate terms with competitive interest rates.LoanDepot doesn't disclose the minimum credit score requirements for a VA loan. However, you may need an estimated minimum credit score of 500.

Jumbo Loan

In 2022, the conventional loan limit in most parts of the country is $647,200, with high-cost areas cappedat $970,800. LoanDepot’s Jumbo loan allows home buyers to borrow above these limits, up to $3 million to purchase or refinance a home. LoanDepot offers both fixed and adjustable rates. While LoanDepot doesn't advertise its Jumbo loan qualifications, these types of loans generally have stricter requirements due to their size.

Refinance loans

One thing that stands out about LoanDepot is its Lifetime Guarantee program. If you get a mortgage from LoanDepot, the company waives lender fees and reimburses appraisal fees on future mortgage refinances.

The mortgage company offers a rate and term refinance that allows you to change the length of your loan term or switch from an adjustable rate to a fixed-rate mortgage.

Similarly, LoanDepot issues a cash-out refinance. With a cash-out refinance, a homeowner can tap into their home equity to borrow more than their current mortgage loan and receive the difference in cash. The funds can be used for any purpose, including debt reconciliation or financing home improvements.

loanDepot Rates and Fees

LoanDepot doesn’t advertise current home purchase or refinance rates on its website. This can be frustrating if you’re looking to quickly compare different lenders to find the best offers. For accurate rates and fees, you’ll need to contact LoanDepot for a customized quote.

While LoanDepot doesn’t charge application or prepayment penalty fees, your loan will come with other fees and closing costs. Like any other lender, LoanDepot may charge you origination fees. Here are other fees you might be charged:

• Appraisal fee - Appraisal fee covers the cost of a professional appraiser evaluating your home’s value.
• Credit report fee - The lender charges a credit report fee for pulling your credit history.
• Lenders fee - Lenders fee covers the cost of underwriting your loan. The amount ranges between 0.5% –1.0% of your loan amount.
• Recording fee - Recording fee pays for the cost of transferring the ownership of the property.

LoanDepot Mortgage Application Process

LoanDepot delivers a completely digital mortgage experience and in-person help at any of its 200-plus lending locations across the country. loanDept is a direct lender and may be able to offer quicker closing times to borrowers. Since LoanDepot also services the loans it makes, you'll be working with one company from the time you apply until the loan is paid off.

LoanDepot’s mello smartloan digitizes and automates every step of the loan process. The proprietary software allows you to do the following:

• Start your loan application online

• Validate your income, assets, and employment information electronically

• Upload required documentation securely

• E-sign documents

• Track the status of your application

• Close your loan online at a preset date

Before beginning your application process, you can use LoanDepot’s mortgage calculators for a quick estimate of how much you can afford. To get a full yearly or monthly amortization schedule, click on “view report.”

To begin your application process, visit Loandepot.com and choose the loan product you’re interested in (purchase or refinance loan). For pre-approval, fill in basic information, including your Zip Code, estimated property purchase price, how much you’ll pay as your down payment, credit score range, name, and email address.

Upon submitting your basic details, the lender will connect you with one of their loan officers to help set up your buying or refinancing home goals. You’ll then select a loan option that best suits your needs. To get approved, you may be required to submit the following documents:

• Tax returns and W-2 forms for the past two years

• Payment stubs from the past couple of months

• Mortgage or rent payment history for the past year

• List of all debts, including credit cards and auto loans

• List of all assets, including bank statements, real estate, and any other investment records

Once your loan is approved, you can close on the loan at a predefined time convenient to you. LoanDepot’s mello smartloan leverages technology to deliver optimal customer experience.