Quicken Loans and Rocket Mortgage: BiggerPockets Review

By Mindy Jensen

May 26, 2020

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Quicken Loans, originally known as Rock Financial, is a mortgage lending company headquartered in the Detroit, Mich., financial district. In the late 1990s, Rock Financial shifted from a traditional mortgage provider to an online-focused lender. The home mortgage business in America was traditionally fragmented due to varying regulations in each state. Rock Financial challenged this orthodoxy, offering loan applications online that were reviewed by experts versed in the regulations of each region, but located in a central headquarters.

In December 1999, Intuit—maker of programs like QuickBooks, TurboTax, and Quicken—purchased Rock Financial for $532 million. The company was renamed Quicken Loans. In June 2002, founder Dan Gilbert led a small group of private investors in purchasing the Quicken Loans subsidiary back from Intuit for $64 million.

Quicken Loans has consistently been awarded the highest customer satisfaction rating among primary mortgage originators in the U.S. for 10 straight years, as well as being one of top 20 companies to work for and a top pick for overall best mortgage lenders, per Consumers Advocate.

Unlike other large mortgage lenders that depend on deposits, Quicken Loans relies on wholesale funding to make its loans and uses online applications rather than branches. Amrock and One Reverse Mortgage are also part of Quicken Loans.

The company closed more than $400 billion in mortgages across the U.S. from 2013 to 2018, making it the U.S.’s largest overall retail lender in 2018.

Quick facts

Quicken Loans has a minimum FICO credit score of 620 for its conventional, VA, and USDA loans. FHA loans are available to borrowers with a credit score of at least 580.
With a conventional loan, including a YOURgage, borrowers can put as little as three percent down. FHA loan borrowers must put down at least 3.5 percent, and VA and USDA loans don’t require a down payment at all—although VA loans do charge a one-time funding fee.
The mortgage origination fee averages about 0.5 percent of the loan amount. Government mortgages backed by the FHA, VA, or the USDA may be slightly higher, but Quicken Loans says its lender fee won’t exceed one percent of the loan amount.
Quicken Loans charges a “good faith deposit” of $400 to $750 to help cover the cost of pulling your credit report, your home appraisal and additional loan processing costs. When you close your loan, Quicken Loans credits your deposit to your closing costs.
Quicken will give you a credit toward your closing cost if you opt for a higher interest rate when you get a mortgage. Quicken Loans calls this option the “Closing Cost Cutter.” If a lack of ready cash is your problem and you want to reduce your closing costs, the Closing Cost Cutter may be an appealing option.

Pros

Quicken Loans couples a fully online application with available mortgage advisors for those who want a human touch.
They can instantly verify employment and income for more than 60 percent of working Americans.
Offers custom fixed-rate loan terms between eight and 30 years.
Provides FHA-backed loans and USDA loans in addition to products offered by Freddie Mac and Fannie Mae, with down payments as low as three percent.

Cons

Quicken Loans does not offer home equity loans or home equity lines of credit.
The company does not consider alternative credit data. They exclusively look at credit scores and debt-to-income ratios.
Limited to no face-to-face service.

Mortgage products

Quicken Loans customers have quite a few options:

Fixed-rate mortgage

Quicken loans offers conventional mortgages with fixed-rate terms of 15 and 30 years. It also offers 7/1 and 5/1 adjustable-rate terms. And both fixed- and adjustable-rate conventional mortgages are available with no prepayment penalties.

Adjustable-rate mortgage (ARM)

This mortgage option from Quicken generally has a lower interest rate. ARMs have an introductory period that can be five, seven, or 10 years where the interest rate is fixed. Following the introductory period, the rate is adjustable throughout the loan term and can fluctuate up or down.

Federal Housing Administration (FHA) loan

This government-backed home loan offers fixed- and adjustable-rate terms of up to 30 years and down payments as low as 3.5 percent. It requires a minimum qualifying credit score of 580.

Veterans Affairs (VA) loan

Available to active service members, veterans, and their spouses, Quicken Loans VA home loans have zero percent down payment options and jumbo loans of up to $1.5 million. VA loans are offered with credit scores as low as 620 and with 15-, 25-, or 30-year fixed-rate terms.

United States Department of Agriculture (USDA) loan

Homeowners in eligible rural areas with a credit score of at least 620 can purchase a home with no down payment and save on mortgage insurance.

Jumbo loan

Quicken Loans’ jumbo mortgages let you take out a mortgage of up to $3 million. You can take a cash-out refinance of up to $500,000. The minimum credit score for a jumbo loan from Quicken is 700.

YOURgage

This is Quicken’s flexible, proprietary mortgage product. This fixed-rate loan offers terms of eight to 29 years for more control over your repayment term, with refinancing up to 97 percent. Qualifying homeowners can get a YOURgage with as little as three percent down.

Quicken Loans and real estate investors

Quicken Loans pre-approval process is simple, with the process generally taking 30 minutes, depending on the borrower’s profile. The entire application process is fast and easy, as most borrowers will note. Borrowers can also receive a credit of $750 at closing from a referral. On the downside, rates are relatively high and there are a lot of fees associated with loans, but if you’re a returning customer these fee’s could be waived depending on loan terms.

They will do loans on rental properties, but are not all that flexible. Quicken will do investment property loans with 20 percent down—and won’t budge much from that. They have been known to offer 15 percent down on single-family properties, but 25 percent down on multi-family properties, said New York real estate investor Mark Smith.

When it comes to financing properties, there are too many hurdles and delays for investors, said a number of potential borrowers. Leopoldo Vazquez, a Texas investor, noted that the company isn’t investor-friendly, is too picky, and likely won’t consider the loan if the house needs work. Overall, most real estate investors recommend finding a local lender versus using Quicken.

The company might be a good choice for those looking to finance their primary residence, but even then it can be difficult if their income situation isn’t straight forward. That is, self-employed individuals and those that get their income from other sources, such as rentals, might have a difficult time dealing with Quicken.

Quicken Loans interest rates

With Quicken Loans you are paying for the convenience, so to speak, as their rates are above the national averages. Granted, rates will vary based on personal financial situations. Still, for nearly all of Quicken’s mortgages products, including fixed-rate conventional and VA loans, it’s above the national average. Quicken currently isn’t publishing its rate for ARMs.

As well, Quicken also requires points at closing. For its 30-year fixed conventional and FHA loans, they charge 2.0 points. Quicken charges 2.125 points on its 30-year fixed VA loan and 15-year fixed rate mortgage. On its 10-year fixed rate mortgage it charges 1.875 points.

Quicken Loans application process

In some respects, the process of obtaining a mortgage through Quicken Loans is similar to that of traditional lenders. You can begin by calling or chatting with a Quicken Loans mortgage banker, or by filling out a mortgage application online. The company uses your credit score and basic financial information to determine the loan options and rates for which you qualify.

Before you close the loan, the company has to underwrite the mortgage—that is, verify that your income and employment information is correct and make sure you have adequate homeowner's insurance. It also has to order a home appraisal from a third party.

These steps cost money, which is why Quicken requires that borrowers make a “good faith deposit” of between $400 and $750. The good news is that the company deducts the deposit from your other closing costs, so in the end, you may not be paying more than you would with other lenders.

Rocket Mortgage application process

Rocket Mortgage, one of Quicken's loan products, offers a different experience. With Rocket, you start the process online and provide information about where you work and do your banking. For many consumers, the company is able to pull pay stubs and bank statements directly from their financial institutions, eliminating the need to find those documents and send them over.

As a result, it's simpler—and significantly faster. Some of the company's first ads in 2016 touted its ability to provide approvals in as little as eight minutes. Rocket Mortgage seems to back off those claims in more recent advertising campaigns, but it's still considerably faster than the traditional loan process.

Quicken Loans not right for you? Read more mortgage lender reviews.

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