SoFi and other innovative online lenders like it are disrupting the mortgage business. Well, they are if you are a high earner with outstanding credit. As SoFi so bluntly put it in its first Super Bowl ad (see below), SoFi has great rates for great people. The not-so-great among us can take a hike. A rate hike that is.
If you are in great financial shape, read on. SoFi can get you a rock bottom mortgage loan with affordable down payments and no application, origination, or any other type of lender fees.
If your credit and finances need some working but you still need a home loan, check out SuperMoney’s mortgage search engine. There are mortgage lenders for all type of budgets and credit scores.
Mortgages are SoFi’s most recent loan product. As with its student loans and personal loans, SoFi manages to undercut the interest rates of most traditional and alternative lenders and still offer excellent terms. If we sound excited about SoFi’s mortgages, it’s because we are. Here’s why:
What Are The Benefits of SoFi Mortgages?
- No application or origination fees. This is huge. The average mortgage has a 1% closing fee. On a $300k home loan, that is $3,000: a serious chunk of change
- No prepayment penalty fees
- Pre-approval does not require a hard credit inquiry
- Loans of up to $3 million
- Loans are available for primary residences and second homes
- You can pre-qualify for your real rates without a hard credit pull
- Only a 10% down payment is required
- No private mortgage insurance required
- Flexible debt-to-income limits
- Application process takes 30 days or less
What Are SoFi’s Mortgage Interest Rates and Terms?
- SoFi’s mortgage rates vary widely depending on whether it is a 30-year fixed loan, a 15-year fixed loan or an adjusted rate loan. The rate also varies depending on how large a down payment is made. The adjusted rate loans have a fixed rate for the first seven years after which the loan may increase or decrease.
- SoFi offers loan amounts of up to $3 million.
As of March 2016, SoFi offers loans with rates as low 2.625%. These are SoFi’s mortgage rates.
- Adjusted rate loans have interest rates ranging from 2.625% to 4.262% APR.
- 15-year fixed rate loans have interest rates ranging from 2.788% to 5.792% APR.
- 30-year fixed rate loans have interest rates ranging from 3.370% to 6.399% APR.
What Do You Need to Qualify for a SoFi Mortgage?
SoFi mortgages have excellent terms, but they are not for everyone. This is SoFi’s eligibility criteria.
- Excellent credit history
- Solid employment history
- A regular and high income
- Be at least the age of majority in your state of residency
- Be a US citizen or permanent resident
- Purchase a property in a state where SoFi is licensed to originate mortgage loans.
SoFi is looking for people with great jobs, who have exemplary saving habits, and have a low income to expense ratio. Basically, SoFi is only interested in lending to people who will have no trouble repaying their mortgages, at least based on their current financial situation.
How Does SoFi’s Mortgage Application Process Work?
SoFi’s mortgage application is a four-stage process. Here are screenshots of each stage and a description of the information you will need to provide.
1. Provide Personal, School, Employment and Loan Information
As with personal loans and student loans, applicants must include their name, address, date of birth, citizenship status, the school they attended, the degrees they completed, their place of employment income and work experience.
2. Determine Mortgage Eligibility
Borrowers must provide additional information on the type of mortgage they require, new property or refinance, which state and county it is located in and whether there are homeowner association dues. They must also specify whether they are single or married, have alimony or child support expenses and whether they will include a co-applicant in the application.
3. Provide Mortgage Information
Applicants must specify the purchase price of the property, how much they will put as a down payment, and whether they want a 15-year fixed rate loan, a 30-year fixed loan or a 30 year adjusted rate mortgage.
4. Upload Documents
Applicants must now upload documents so SoFi can verify the borrower’s identity, employment, income, address, and property information. SoFi accepts photos or scans of the documents. At this stage, borrowers must confirm the information provided in the form by answering yes or no to a series of declarations, such as “have you declared bankruptcy within the past seven years?” or “are you obligated to pay alimony, child support, or separate maintenance?”
If the applicant’s application is successful, a loan officer will get in contact with the borrower and provide a documents package that must be reviewed and signed electronically.
SoFi Mortgage Loans: The Bottom Line
SoFi works off a simple yet solid business plan, which has allowed it to offer $8 billion in loans to 125,000 members (as of March 2016). It offers low-interest mortgages, consumer loans, and student loans by using money from institutional investors and wealthy individuals who receive a return on investment of up to 6.5%. SoFi’s mortgage loan process is fast, easy to complete, and allows borrowers to put as little as 10% down with no mortgage insurance required. Not only that, SoFi loans do not charge borrowers an origination fee.
The catch is that SoFi mortgages are only available to super-prime borrowers with high incomes and spotless credit histories. If you are looking for a mortgage loan, check out SoFi. You are probably not “great” enough to qualify, but it won’t hurt your credit to try. The worst that can happen is you get a reality check about your credit situation. SoFi may even give you a few pointers into how you can be “great” in the future. Another prime lender with easier to meet requirements is Quicken Loans, the largest online mortgage lender in the United States.
Captain Money Disclaimer: Being “great” in the eyes of lenders does not guarantee your teenager daughter, your friends, boss or spouse will agree. They all have different eligibility criteria.