You’ve taken a huge step – you’ve decided to buy a house. Now, you have to decide how to finance it. Let’s face it, there are a lot of options out there when it comes to your mortgage. Enter – Rocket Mortgage.
Jump To:
- What Is Rocket Mortgage?
- Types of Loans
- How the Online Loan Process Works
- Pricing and Fees
- Key Considerations
- Our Take
Loans Available: Fixed, Jumbo, Adjustable, FHA, USDA, VA, Refinance, Purchase
Minimum Credit Score: 580
Minimum Down Payment: 3%
Origination Fee: 1/2 – 1%
What Is Rocket Mortgage?
The process of applying for a mortgage can be tedious and frustrating, especially for first-time homebuyers. In 2015, Quicken Loans saw an opportunity to make the process easier, less intimidating, and faster by creating Rocket Mortgage.
Rocket Mortgage allows potential home buyers and homeowners who want to refinance their home to take the entire application process online. Everything from the initial application to closing is done on the website or through the mobile app.
This simplified, tech-based process has been a game-changer for mortgage lenders and home buyers. There’s more to consider about Rocket Mortgage thank meets the eye.
This includes credit score required, average interest rates, income to debt ratio, the average down payment, and other pre-approval factors that decide whether or not you’re approved for a mortgage.
There are also several types of loans offered by Rocket Mortgage that you’ll need to choose from. This may sound overwhelming, but we’re here to help.
We’ve done a full Rocket Mortgage review to cover everything you need to know to understand the entire process so you can determine if it’s the best home loan option for you. Let’s start with how this works.
Types of Loans Available
Before you even apply for a mortgage, you’ll need to select a type of loan. Here’s a brief breakdown of each type of loan Rocket Mortgage offers.
FHA Loan
The Federal Housing Administration backs these loans. FHA loans are designed to help people with less-than-stellar credit scores and limited cash for down payments have better access to lending.
Quicken Loans (Rocket Mortgage’s parent company) will require that you have a median credit score of at least 580 and enough cash for a 3.5% down payment.
VA Loan
These loans are backed by the United States Department of Veteran Affairs and are only available for United States veterans and their spouses.
VA loans don’t require a down payment, but they do require a median credit score of at least 620.
USDA Loan
The United States Department of Agriculture backs these loans. They are designed for low-to-moderate income people who are buying homes in rural areas. USDA loans don’t require a down payment, but they do require a median 640 FICO Score.
Jumbo Loan
If the property you’re purchasing costs more than $510,400, you may need a Jumbo loan or mortgage. You’ll need an excellent credit score – at least 700 – and enough cash to put a 20% down payment on the property.
How the Online Loan Process Works
The Rocket Mortgage process is as simple as it gets. They can help you with your online application through closing.
1. Apply Online
Using the website or the Rocket Mortgage app on your smartphone or tablet, you get to choose the best loan option for you.
You can apply for a mortgage (click on “Buy a Home”) or apply to refinance a mortgage (click on “Refinance.”).
You’ll enter your email address and a secure password to create your Rocket Mortgage account to get started.
2. Enter Your Financial Information
Next, you’ll enter your bank information, home address, income amount, debt and/or current mortgage amount, and more basic financial information.
Rocket links to the bank information you provide so it has a clear, up-to-date picture of your finances.
Make sure you have the following information handy when you start your application:
- Your email address, plus an email address for each person applying for the loan with you
- Online banking login information OR amounts in each bank or investment account
- Your income and employment information, plus information for each person applying with you
- Your social security number, plus the number for each person applying with you
Every bit of information you provide here will help Rocket determine if you’re eligible for a home loan and the total amount, interest rate, and down payment amount that is required.
3. Get Your Credit Score
After entering your information, Rocket will pull and show you your FICO Score (credit score) to determine if you are eligible for a home loan.
A score of at least 580 is required to move forward with your mortgage application, but some loan types require a score of at least 700.
4. See Your Loan Options
With your FICO Score, you are presented with some loan options for which you qualify. Those could be FHA loans, VA loans, USDA loans, or jumbo loans.
You’ll be able to see how much you can afford to spend on a home with all your financial information considered. If you’re looking at homes, having this number on hand is essential to keep your focus on homes that are true possibilities for you.
On this screen, you’ll be able to toggle your loan options with a menu that allows you to change your mortgage term, total down payment amount, and interest rate.
You’ll also be able to compare adjustable-rate mortgages with fixed-rate mortgages to see which option is truly best for you.
When you’ve chosen the options that you like best, you’ll tap or click on a button to see if you’re approved.
5. Get Pre-Approved
After you select your preferred loan options, Rocket sends your information to their automated Quicken Loans underwriting system. This is when you’ll find out if you are pre-approved or not.
If you are, that’s great news! You can lock-in the rates you selected if you receive pre-approval. This means the rates you chose won’t suddenly change in a few days.
Remember, pre-approval is not the same thing as being approved for a loan – all your information will still need to be verified by the underwriting agency once you find the property you want to buy.
For those already in the home-buying process, Rocket will guide you through the rest of the transaction and provide you with a verified pre-approval letter.
For those who are already under contract and purchasing a home, Rocket takes care of submitting and processing your approved loan through Quicken Loans.
6. Underwriting
Once you find a property you like, you can use your pre-approval letter to make a strong offer. If the seller accepts your offer, Rocket’s underwriter will begin to verify all of your financial information and details.
They’ll also verify the details about the property you’re looking to purchase with a few additional steps:
- Order an appraisal
- Verify home title
- Schedule required inspections
When this is done, you’ll get your Closing Disclosure document. It tells you all your loan information, from your down payment and monthly payment to your closing costs and interest rate.
This way, you can review it in detail before closing. This should be very similar to the Loan Estimate you received during your application process.
7. Closing
After the seller has accepted your offer, you’ve reviewed your Closing Disclosure document, and your loan is approved, you have one final step to take:
Going to a closing meeting. This is your time to address any concerns, questions, or changes to your loan terms.
Rocket recommends that you bring the following documents and forms of ID with you:
- Closing disclosure document
- Photo ID
- Down payment in full
- Check to cover closing costs
After this meeting, you’ll officially be considered a homeowner. That calls for a celebration!
Rocket Mortgage Pricing and Fees
Let’s take a closer look at how much it costs to use Rocket Mortgage. Rocket Mortgages are processed through its parent company, Quicken Loans.
- 0.50% – 1% of your total loan amount
- 2.75% – 3.62% interest rate
When you take out a loan, you can expect to pay something called an origination fee. This fee might be 0.50% to 1.0% of your total loan amount, depending on the type of loan.
You also include the Rocket Mortgage interest rate with every mortgage payment you make. National mortgage rates vary widely, and yours will depend on a few things.
These include credit score, income-to-debt ratio, loan term, and whether your loan is an adjustable or fixed-rate mortgage. The average mortgage interest rates are about 2.75% to 3.62%.
Key Considerations
With anything, it’s important to have things to remember. In this case, you’re entering into a financial transaction that could positively/negatively affect you for the rest of your life. So be sure to do you homework on all of this.
Estimated Payment
While it may seem like a good idea to buy a $500,000 on a $50,000 salary, it’s not. Trust us. But don’t take our word for it — use Rocket Mortgage’s online payment affordability calculator to determine what you can afford.
Credit Score
You need at least a 580 credit score to be approved for a home loan through Rocket Mortgage. Rocket uses your FICO Score, which might not be the same score you see when you check your credit score online.
Your FICO Score could be a little higher or lower than the credit score you see when you check online, so be prepared to see a score that’s a little different than you expect.
Self-Employment
If you’re self-employed, your application process won’t be quite as simple. You won’t be able to complete everything online, but you can start your application online.
When you reach the step of entering your income and employment information, you’ll get in touch with one of Rocket Mortgage’s Home Loan Expert to answer some additional questions.
Closing Costs
Don’t forget about having enough cash on hand for closing costs, which will be your responsibility to pay, even if you’re taking out a VA Loan with no down payment. Closing costs are typically about 2% to 5% of the total purchase price.
Home Type
Rocket Mortgage doesn’t cover loans for manufactured or mobile homes. You will need to seek a different loan product if this is the type of home you’re looking to mortgage.
Application Time
It’s much faster than the traditional process of applying for a mortgage, but it isn’t instant. Expect to spend about 30 minutes to an hour filling out your online application.
Making sure you have all the required information and documentation ready when you can help speed up the mortgage process.
Communication
If you’re worried about getting lost during the process or having questions answered along the way, you’ll like the way Rocket Mortgage allows you to keep in touch with your mortgage team during the process.
You’ll be able to write messages, see the overall “to-do” list, manage your paperwork and documents, and see where you are in the loan process. You can do this directly in the app or on the website.
Our Take
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Pricing
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Features
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Value
Summary
As long as you make sure you’re ready for the process (good credit score, adequate income, low debt, proper documentation), Rocket Mortgage can help you speed through the process and get into your dream home a little faster.
Overall
4.3User Review
( vote)Rocket Mortgage makes getting an online mortgage possible for millions of Americans and has effectively changed the game.
Within an hour, you can create an account, submit your contact and financial information, see your credit score, and find out if you’re pre-approved.
With that information, you’ll be able to see all your mortgage and loan possibilities at your fingertips – different loan types you may qualify for, different loan terms, interest rates, and varying down payment amounts.
This allows you to make the best choice for your finances and lifestyle. Rocket Mortgage only falls short if you’re the type of home buyer who wants to deal directly with people you trust during the mortgage process.
While there are ample opportunities to chat online or speak on the phone with a Quicken Home Loan Expert, these types of communication just aren’t the same as having in-person meetings.
Should You Use Rocket Mortgage?
If you’re looking for a way to get a mortgage (or refinance) online quickly, Rocket Mortgage offers everything you’ll need from pre-approval to closing.
As long as you make sure you’re ready for the process (good credit score, adequate income, low debt, proper documentation), Rocket Mortgage can help you speed through the process and get into your dream home a little faster.
