Rocket Mortgage vs. Loandepot | Which mortgage lender is right for you?
Finding the best mortgage lender for your needs can sometimes be a tedious part of the home buying process, but it can be worth your time and effort.
Interest rates can vary by 0.50% or more between two borrowers of similar qualification, according to a study by the Consumer Financial Protection Bureau. Although that may not seem like much, on a large loan like a mortgage, even a small difference in the interest rate can save you thousands of dollars over the life of the loan.
But what should you look for when shopping? What are the most important factors to consider? At NextAdvisor, we have developed a robust methodology to determine the best mortgage lenders in the country.
We rate our lenders on factors such as pricing transparency, online convenience, accessibility to most borrowers, product mix and track record of customer satisfaction.
To show how to compare different lenders, we’ve taken two of the most popular names in the mortgage industry, Rocket Mortgage and loanDepot, and put these factors side by side.
Both Rocket Mortgage and loanDepot are non-bank lenders that conduct most of their business online in all 50 states. But they differ in a few areas, such as the types of loans offered and affordability. Here’s how the two companies compare.
As with all of our reviews of mortgage lenders, our analysis is not influenced by any partnership or advertising relationship. For more information on our scoring methodology, Click here.
Comparison of mortgage lenders: Overview of Rocket Mortgage vs loanDepot
Rocket Mortgage is the online mortgage lender for Quicken Loans and is one of the largest mortgage lenders in the United States NextAdvisor named the Detroit-based company as one of the top mortgage lenders due to its online application process simple, its large national footprint, its low level of consumer complaints, the transparency and accessibility of its rates and fees, and the company’s broad offering of mortgage products.
loanDepot is a solid option with quick closings, a strong product menu, and a positive track record with consumer complaints. However, we found that there were additional layers and steps to get information on rates and fees compared to Rocket Mortgage.
Here is an overview between Rocket Mortgage and loanDepot.
|Side by side||rocket mortgage||loanDeposit|
|NextAdvisor Overall Rating||4.6 stars||4.3 Stars|
|Available States||All 50 States||All 50 States|
|Price transparency||5/5 stars||3/5 stars|
|Online amenities||4/5 stars||4/5 stars|
|Variety of loan products||4/5 stars||5/5 stars|
|Client satisfaction||5/5 stars||5/5 stars|
|Minimum credit score||580 – 620 depending on the type of loan||580 for the FHA; 620 for VA and conventional; 700 for jumbo|
|Minimum deposit||0% to 3.5%||0% to 5%|
|Closing schedule||45 days||45-60 days|
Rocket Mortgage vs loanDepot: Products Offered
Different types of loans will each have their own set of advantages and advantages. For example, conventional loans can be a great choice for borrowers with good credit, income, and assets that can be documented. On the other hand, those who find it difficult to save for a down payment but have a military affiliation may qualify for a VA loan with 0% down payment. Likewise, some lenders may not be able to work with homeownership programs and grants that help pay down payments and closing costs. When researching rates from different lenders, find out if their product offerings match your needs.
LoanDepot’s menu of mortgage products is more extensive than that of Rocket Mortgage. If you’re looking for a construction loan, renovation loan, adjustable rate mortgage, or rehabilitation loan (FHA 203(k)), loanDepot has you covered. Here’s a side-by-side look at Rocket Mortgage’s and loanDepot’s product menu:
Rocket Mortgage vs loanDepot: Rates and Fees
Each mortgage lender offers varying interest rates and fees. These rates and fees can be offered in different ways, which can make it difficult to get a clear idea of which lender is offering the best deal. For example, some lenders will offer a lower interest rate, but simply add discount points and other fees to the loan. Other lenders will offer what appears to be a higher interest rate, but instead charge less by covering your lender fees and closing costs. It’s important to understand all of the fees associated with your loan, as this will allow you to make an informed decision about which lender is best for you.
Although rates and fees may vary depending on the loan program you select, we have obtained loan estimates from Rocket Mortgage and loanDepot for a $160,000 conventional loan to give you an idea of the specific fees that may be billed.
|Rates and Fees||rocket mortgage||loanDeposit|
|Advertised rates include discount points||Yes||N / A|
|Assessment fees||$400 to $600||$400 to $600|
|Credit application fees||$50||$22|
|Tax service charge||$48||$68|
|Flood Certification Fee||$8||$10|
|Penalty for prepayment||Nope||Nope|
|Incentives for borrowers||Nope||Yes, lifetime warranty|
|Credits from the lender||Yes||Yes|
|Rate lock||45 days||45 days|
Rocket Mortgage vs loanDepot: Transparency and Online Convenience
The transparency and convenience of getting information online can go a long way to making it easier to find the best loan for your needs. That’s why price transparency is one of the top five scoring criteria for determining the best mortgage lender. Some lenders, like Rocket Mortgage, offer a level of transparency by providing quotes online, along with a list of third-party fees. As for LoanDepot, we were unable to find any of this information on their website. Instead, we had to submit an application. Although this is an extra step, the loan representative we spoke with was very informative and walked us through several loan options.
Rocket Mortgage, named one of NextAdvisor’s Top Mortgage Lenders, provides rates online, though detailed information on fees and options for lender discount points or credits requires a phone call with one of their representatives.
|Online Transparency and Convenience||rocket mortgage||loanDeposit|
|Fast online pre-approval||Nope||Nope|
|Rates available online||Yes||Nope|
|Fees accessible online||Nope||Nope|
|Credit check needed for a quote?||Nope||Yes|
|Easy online application||Yes||Yes|
|Phone call with loan officer needed before getting a quote||Yes||Yes|
|Application at Closing: All-Online Mortgage Process||Yes||Yes|
|Document download available||Yes||Yes|
|Website/App Experience||Smooth and seamless||Clumsy and confusing|
|Online tools/calculators available||Yes||Yes|
Rocket Mortgage or loanDepot: who is better to refinance with?
Refinancing can help you achieve your goals in several ways. You can use it to lower your monthly mortgage payment or shorten the loan term to pay off your mortgage faster. If you have enough equity in your home, you can also do a cash refinance to help pay for things like home improvements or pay off other higher-interest debt. While there’s generally no limit to the number of times you can refinance, each time you do it can result in several thousand dollars in lender fees. Be sure to use a good mortgage calculator to determine how a refinance will help you achieve your goals before going too far in the process.
As far as borrower incentives are concerned, loanDepot offers a lifetime guarantee. By getting a mortgage from the company, loanDepot will waive all lender and appraisal fees if you decide to refinance your home with them in the future. If this is something you might want to take advantage of, be sure to read through all the requirements to be sure you would qualify for this warranty.
How to Shop for a Mortgage Lender
When researching rates, it’s important to consider different types of lenders. You may find that a bank, credit union, or mortgage broker offers certain incentives or loan programs best suited to your specific needs. Also, don’t forget to ask for a written loan estimate, as this can help you avoid unexpected fees or charges from arising at a later date.
To simplify the process of comparing fees and rates between lenders, be sure to provide the same loan information to each lender, such as loan amount, property type, and location. Once done, try comparing the same interest rate to see how it compares to another lender. This can be a big step in buying rates, as some lenders may advertise a low interest rate, but just charge extra fees and discount points. On the other hand, a higher interest rate may not seem as attractive, but if a lender offers to cover all closing costs, this may prove to be the most cost-effective solution.
Finally, if you are in the market to buy a home, be aware that pre-qualification is not the same as pre-approval. A prequalification will show that you are taking the initial steps to determine how much home you can afford, but usually does not involve checking any of your financial documents. A pre-approval, on the other hand, is usually only issued after a bank has verified that your credit, income, and assets are sufficient for a certain loan.
As a homebuyer, pre-qualification is a great start, but pre-approval will give you much more credibility and leverage when making offers for sellers to consider.
Whether you’re looking to buy or refinance, you can compare lenders’ offers here using this home loan comparison tool. You can enter the loan amount, rate, fees and term for each offer and see a real side-by-side comparison of your potential monthly mortgage payment and the evolution of closing costs, lender fees and rates interest over time with each loan offer.
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