Rocket Mortgage Review 2022

Customer Experience

While you’ve almost certainly heard of Rocket Mortgage before, it was probably as a product or platform, not as an entire company. Well, in 2021, Quicken Loans officially rebranded themselves completely as Rocket Mortgage as part of a company-wide effort to advance their online mortgage process. Rocket Mortgage provides you with the tools to handle the mortgage process completely online, including their Rocket Mortgage mobile app.

You’ll start with an online application which will allow you to upload and verify your information, customize your mortgage options among a variety of products, including FHA and VA program, get your approval, and lock your rate without ever speaking to a person. That’s not to say that you’re completely on your own. Having been in business since 1985, their team can help you answer any questions along the way and work with you through the entire process. They’ve been ranked highest in customer satisfaction for Primary Mortgage Origination by J.D. Power for 11 straight years, 2010 through 2020.

Rocket Mortgage provides several resources, like articles and calculators, to research your options and become a more knowledgeable customer. They also claim to have removed "middleman" steps to reduce the paperwork and use an online pre-qualification process, which allows them to provide you with product comparisons and quotes.

Rocket Mortgage Loan Types

Rocket Mortgage offers a range of loan products to meet the needs of different home buyers, including first-time homebuyers. Rocket offers conventional, VA, FHA, YOURgage, and Jumbo loans with fixed or adjustable rates. If you’re looking to refinance your current mortgage, Rocket mortgage provides a traditional rate-and-term refinance, a cash-out refinance, and FHA and VA streamline refinances.You can also get a home equity loan. However, Rocket mortgage does not issue USDA loans and home equity lines of credit(HEOCs). Here is a breakdown of these types of loans:

Purchase Loans

Conventional Loans

Conventional loans are loans made by a lender that aren't guaranteed by a government entity. Conventional "conforming” loans follow the guidelines set by government-sponsored enterprises Fannie Mae and Freddie Mac. These guidelines include credit score, loan limits, income requirements and other factors.

Generally, conventional mortgages have stricter underwriting requirements than government-backed loans, such as FHA or VA-backed loans. Rocket Mortgage offers a 30-year fixed rate mortgage, a 15-year fixed rate mortgage, and Adjustable Rate Mortgages (ARM) that have a fixed rate for 7 or 10 years before the rate changes at six-month intervals.

A 30-year fixed rate mortgage offers lower monthly payments as the loan amount is spread over a longer period. It also assures you that your interest rate will remain fixed for 30 years. A 15-year fixed-rate mortgage comes with a lower interest rate but with larger monthly payments.

A 7/6 ARM has a fixed rate of 7 years, after which your interest rate will change every six months. While a 10/6 ARM offers a fixed rate for ten years. In either case, after the fixed-rate period ends, the mortgage's interest rate will change every six months based on a formula. Adjustable rate mortgages may offer a low introductory rate during the fixed rate period, making them a good choice if you plan to own your home for only a few years.

To qualify for a conventional loan with Rocket Mortgage, you’ll need the following requirements:

• A minimum credit score of 620

• A down payment of at least 3%

• A debt-to-income ratio of less than 50%

Federal Housing Administration (FHA) Loans

Backed by the Federal Housing Administration, Rocket Mortgage FHA loans come with more lenient qualification requirements than conventional loans. In addition to 30-year and 15-year fixed rate FHA loans, Rocket Mortgage also offers FHA-backed adjustable rate mortgages. Here are the requirements:

• A minimum credit score of 580

• An initial minimum down payment of 3.5%

• An upfront mortgage insurance premium of 1.75% of the total loan amount

Department of Veterans Affairs (VA) Loans

Rocket Mortgage offers VA and Jumbo loans with no down payment to qualified service members, veterans, and surviving spouses. To qualify for a Rocket Mortgage VA loan, you’ll need:

• A credit score of 580 or higher

• A debt-to-income ratio of less than 60%

• A certificate of eligibility to prove that you’re a qualifying service member or surviving spouse

• A VA funding fee. It’s a one-off fee you pay the Department of Veteran Affairs to support the continuity of the VA loan program. This fee varies depending on the size of your down payment.

Jumbo Loan

A Rocket Mortgage Jumbo loan allows you to borrow more than the conforming loan limits, up to $2.5 million. You can use the loan to finance the purchase of a primary residence, a second residence, or an investment property. A 30-year fixed rate jumbo loan allows you to borrow up to 89.99% of the purchase price of a home, while a 15-year fixed rate or an adjustable rate loan will limit your loan-to-value ratio to 80%. Jumbo loans have more stringent eligibility requirements. Here are the qualification requirements for a Rocket Mortgage Jumbo Loan:

• A minimum credit score of 680

• A debt-to-income ratio of 45% or lower

• A 10.01% minimum down payment for a single-family property up to $2 million and 15% for a duplex

YOURgage Loan

YOURgage loan by Rocket Mortgage gives you the flexibility to choose the length of your loan term to suit your mortgage payoff schedule. You can select a loan term between 8–29 years. YOURgage loan comes with a fixed rate, in which your principal and interest amount remain constant for the life of the loan. To qualify for this loan, you’ll need:

• A credit score of at least 620

• A down payment of 3% or higher

• A debt-to-income ratio of less than 50%

Home Equity Loan

A home equity loan is a second mortgage against the equity in your home, in which you receive a lump sum upfront at a fixed rate and pay it back in predetermined monthly installments over the loan term. Rocket Mortgage offers a minimum home equity loan amount of $45,000 and a maximum loan amount of $350,000. Here are the qualifications for a home equity loan with Rocket Mortgage:

• A median FICO score of 680 of better

• A debt-to-income ratio of no more than 45%

• Keep at least 10% equity in your home after borrowing

Refinance Loans

VA Streamline Refinance

• A lower interest rates and get reduced monthly payments

• A shortened or lengthened loan term

• Or a shift from an adjustable-rate mortgage to a fixed-rate mortgage

Rocket Mortgage requires a credit score of 580 for a VA streamline refinance. However, if you’re switching from a different lender, you’ll need a credit score of 600.

Rate and Term Refinance

FHA Streamline Refinance

Borrowers with an existing FHA loan can refinance to get better interest rates and lower monthly payments with a Streamline Refinance. To qualify for an FHA streamline refinance, 210 days must have passed since your closing on your original loan and you must have not had a late payment of more than 30 days during the past six months.

Cash-out Refinance

In a cash-out refinance, you borrow more than your existing mortgage and take the difference in cash. For VA-eligible borrowers with FICO scores above 620, Rocket Mortgage allows for loan-to-value ratios of up to 100% of the value of the home (90% if your FICO score is 580-619).

Existing Rocket Mortgage customers with a FICO score as low as 580 can borrow up to 80% of their home's value to pay off other debts at closing using a FHA-backed cash-out refinance. However, borrowers who are refinancing loans held by other lenders can still get an 80% LTV FHA cash-out refinance but must have a credit score of 620.

Conventional cash-out refinances, borrowers are limited to 80% LTV and must have credit scores of 620 or above. Rocket recommends that borrowers have less than a 50% Debt-to-Income (DTI) ratio when pursing a cash-out refinance.

Rates and Fees

Rocket Mortgage advertises its 30-year fixed conventional, FHA, Jumbo, and VA loan current rates and APRs on its rates page. Rates can vary widely depending on several factors, and the displayed rates are based on the assumption that you have a good credit score of 720 or higher and a debt-to-income ratio of up to 30%.

Take note of the advertised rates, since most of them include discount points. A discount point is a fee you pay at closing in exchange for a lower interest rate. Each point costs 1% of the loan amount and can reduce your interest rate by as much as 0.25%. If you don't want to (or can't) pay points, the interest rate you'll be offered will be higher. You’ll have to begin your online loan application process to get a customized rate with Rocket Mortgage.

While Rocket Mortgage does not charge you for applying, the loan will come with other costs and fees, as mortgages typically do. Expect to pay about 3%--6% of your home’s total cost in fees and other closing costs. Here are the fees you’re likely to incur:

• Origination fee - Rocket Mortgage charges approximately $1,200 for processing and underwriting your loan.
• Good faith deposit - The lender charges a deposit of $400-$750 to cover appraisal and credit report costs. The deposit is deducted from other closing costs at closing.
• Rate lock fees - Rocket Mortgage’s RateShield program allows you to lock in a rate for 90 days as you shop for your home. RateShield costs of 0.75 basis points ($750 for a $100,000 loan), you can lower your rate one time to take advantage of lower rates or keep your rate locked if interest rates rise.

Rocket Mortgage Loan Application Process

To start your mortgage application with Rocket Mortgage, visit their homepage and select either home purchase or refinance. You’ll answer a few questions and get prompted to create an account by filling in your name, email address, and password. After verifying your account via email, you can begin the pre-approval process by submitting your home buying goals, social security number, and other personal information.

Rocket Mortgage can directly pull much of your financial information, such as assets and other investment account statements, from many U.S financial institutions. And if you’re working, they can also import your income and employment information. Here is a list of documents you may need:

• Copies of Paystubs, W2s or 1099s

• Personal tax returns

• A list of your assets, including real estate, savings, and other investment records

• A list of your debts, including student loans, auto loans, credit cards, and personal loans

• Profit and loss statement if you’re self-employed

Upon uploading the required documentation, the Rocket Mortgage platform reveals your loan options based on your credit data. You can easily adjust your loan term and interest rate to select a loan option that suits your needs. Your loan option is then automatically underwritten to get an approval letter. At this point, the RateShield program allows you to lock your interest rate for 90 days without a purchase agreement.

Once you find a home and make an offer, simply proceed with the full loan application process using Rocket Mortgage's mobile app or website, or contact their loan officers for assistance. While your loan is under the automated underwriting process, you can complete outstanding tasks such as uploading any required documentation, e-signing your paperwork, and even scheduling the date of closing your new loan.

The online dashboard provided by Rocket Mortgage allows you to manage and track your mortgage payments. Their online mortgage process is well designed and streamlined to lead you through the entire loan process.