It has been a rough four years for the mortgage industry. Unless, of course, you are referring to Quicken Home Loans. In that case, business is just fine. It is booming, in fact.
Quicken Loans is the largest online retail mortgage lender in the United States and the second-largest retail mortgage lender. It’s also the leading Veteran Affairs (VA loans) lender and the most significant Federal Housing Administration (FHA) lender. Not bad for a company that was started by four friends in 1985. Quicken Loans growth is particularly noteworthy when you consider the heavyweight banks with century-long heritage it has left in the dust.
Much of Quicken Loans market share growth occurred during the worst part of the great recession (2008 and 2009) when mortgage companies were dropping like flies. Quicken Loans was insulated mainly because it did not deal with subprime mortgages.
So, is bigger better? Should you consider Quicken Loans for your next home purchase or mortgage refinance? This in-depth review will highlight the strengths and weaknesses of Quicken Loans and weigh the pros and cons of doing business with the Detroit-based mortgage lender.
What Does Quicken Loans Offer?
One of the significant advantages of Quicken Loans is its broad selection of mortgage products. Unlike other online lenders that dabble in all kinds of loan products, Quicken Loans focuses on the mortgage sector.
A smart choice for buyers who plan to flip the property in a few years or who want to guarantee lower rates in the early years.
Quicken Loans differentiates itself from the crowd of mortgage lenders by giving borrowers the ability to choose whatever term they prefer from 8 to 30 years. This flexibility provides homebuyers greater control over their budget and provides the option of saving money in interest by paying off the mortgage faster.
30-Year Fixed-Rate Mortgage
The traditional 30-year mortgage, Quicken Loans’ most popular mortgage, offers low monthly payments that are fixed for the life of the loan.
15-Year Fixed-Rate Mortgage
This loan combines the security of a fixed rate with the interest savings of a shorter-term mortgage. If you can afford the larger monthly payments, it can be a smarter option than the 30-year fixed-rate mortgage.
FHA loans are easier to qualify for, provide great flexibility and rate security, and require smaller down payments. If you are looking into an FHA loan, consider Quicken Loans. It has the lowest default rate among FHA originators. QL also offers FHA Streamline, the refinance loan for FHA mortgages.
The Veteran Affairs backed loans provide veterans with lower rates and the option to buy a home with no down payment. Quicken Loans is the leading originator of VA loans.
The choice for buyers looking at properties between $417k and $3 million. QL also offers flexible rates and terms for these big boys.
Quicken Loans’ affiliate One Reverse Mortgage, LLC, provides reverse mortgages to homeowners 62 years and older who want to have their cake (live in their home without mortgage payments) and eat it (cash out on their equity).
What About Quicken Loans’ Rocket Mortgage?
Rocket Mortgage is Quicken Loans’ entirely online mortgage option. Rocket Mortgage leverages a state-of-the-art online underwriting platform to help borrowers get approved for a mortgage in less time than it takes a rocket to reach low earth orbit altitude (8 ½ minutes according to this NASA launch director). Of course, the property appraisal and closing will take a little more, but it is still a revolutionary change in how long mortgages take to process.
What Are Quicken Loans’ Mortgage Rates?
Mortgage rates can change daily and vary wildly depending on the credit profile of the borrower and the type of mortgage purchased. To see the latest rates and terms, visit Quicken Loans profile page.
Tip: A healthy dose of skepticism is recommended when looking at mortgage rates. As you would expect, lenders advertise the best rates available. You may not qualify for these rates. The rates above assume borrowers have a credit score of at least 740 and a loan-to-value rate of 75%. Properties with a higher loan-to-value rate may require private mortgage insurance, which will be added to the monthly payment.
What Are Quicken Loans’ Ratings?
Since Dan Gilbert, the company founder, repurchased Quicken Loans from Intuit in 2002, QL has remained a privately held company. Therefore, it is not required to disclose its financial information. However, rating companies, such as Moody’s and Standard & Poor’s rate Quicken Loans’ financial stability highly. The company receives a Ba2 (outlook stable) from Moody’s and a BB (outlook stable) from Standard & Poors.
Customer satisfaction ratings are Quicken Loans strong points. QL has topped J.D. Power’s Customer Satisfaction Ranking six straight years: 2010 to 2015. In 2010, J.D. Power named Quicken Loans Customer Service Champion. Online customer reviews are mixed. Although it rates high in leading comparison websites (such as SuperMoney), some customers do complain about delays in the loan process and a lack of transparency on fees. However, other clients praise QL for its speed, attentive customer service, and transparent pricing schedule.
How Do Quicken Loans Work?
Quicken Loans has a five-step mortgage process. Here is a summary, so you know what to expect.
Step 1 – Apply online.
QL assigns you a personal banker that will use the information provided on your application form (and additional questions) to help you determine which loan option is best for you. Find more details on the application form below.
Step 2 – The Infamous Credit Pull.
Quicken Loans performs a hard pull on your credit to determine what rates you qualify for. This only takes a few seconds and means you get firm rate offers, not just fuzzy guestimates. A hard credit pull will ding your credit score a little, but its effect is often exaggerated. Expect your credit to drop by a few (around 5) points.
Tip: If you are shopping around for the best mortgage rates (as you should), make sure all the hard credit pulls are done within 14 days. Credit score algorithms consider up to seven credit inquiries performed within 14 days as a single credit pull.
Step 3 – Review Your Options.
Once your credit history is out in the open, QL will offer you the rates and terms available to you. Your banker will help you decide whether a fixed, variable, 15-year, 30-year, FHA, or VA loan is the best deal for your particular circumstances. At this stage, borrowers will need to make a good-faith deposit to show their commitment to obtaining a mortgage.
Step 4 – Open A My Quicken Loans Account.
My Quicken Loans is a platform QL has created so borrowers can access their loan information online or through QL’s smartphone app. It also allows borrowers to sign their documents online, which streamlines the process and allows mortgages to close in as little as two to four weeks. QL will require you to provide financial information, such as pay stubs, tax forms, and bank statements, which you can upload directly to your My Quicken Loan account. No faxes or paper copies needed.
Step 5 – Underwriting.
The underwriting process is a second look at your documents and financial information by a second loan expert to verify the information submitted and ensure it meets QL’s credit criteria. While QL checks your information, it will also schedule an appraisal on your behalf from a state-certified appraisal company. Notice it is the third-party appraisal company, not Quicken Loans, the seller, or the buyer, who determines the value of the property.
Step 6 – Closing.
Once your team of QL loan experts has ensured your mortgage application is complete, and there are no pending details, Quicken Loans will allow you to a time to close the deal. If you are processing a refinance a mortgage, you can even choose where to close the mortgage.
What Is Quicken Loans’ Application Process Like?
Quicken Loans first application form is short and easy to complete. If you meet the essential eligibility criteria, a loan officer will contact you and help you open a My Quicken Loan account where you can upload the necessary documentation (bank statements, tax forms, and pay stubs). Here is a detailed review of each step of the application form.
1. Choose What Type Of Mortgage You Want
Quicken Loans offers to refinance and purchase loans
2. Provide Mortgage Details
Provide the purpose of your loan, what stage you are in the buying process (signed a purchase agreement, buying in a few months, researching options), and where (state and county) you plan to purchase the property.
3. Borrower Eligibility
Determine how much cash you have for a down payment, the purchase price of the property, your credit score, and whether you qualify for VA loans.
4. Submit Personal Details
This is the last page of the original application form. It asks for your full name, zip code, email address, phone number, and language of preference. If you meet Quicken Loans eligibility criteria, a loan officer will contact you and walk you through the rest of the mortgage process.
What Are The Pros and Cons Of Quicken Loans?
Here is what we love about Quicken Loans:
Competitive Rates. Quicken Loans offers competitive rates and terms.
Fast Application Process. QL can process mortgages in as little as 2 to 4 weeks.
Financial Stability. QL is rated highly rated by Moody’s and Standard & Poor’s. It has topped J.D. Power’s Customer Satisfaction Ratings for 6 years in a row.
Wide Selection of Mortgage Products. Not only does QL offer a wide range of home loans, but it is also a leading originator of VA and FHA loans
Largest online retail mortgage lender and second-largest retail mortgage lender.
The lowest default rate among FHA originators.
On the other hand:
QL performs a hard pull on your credit before offering rates. Some online lenders will provide rates with a soft pull. Just remember all lenders will perform a hard pull before approving a mortgage. In any case, credit score algorithms take into account the need to shop around for the best rates and consider credit pulls within the same period as a single inquiry.
Quicken Loans does not have brick-and-mortar branches throughout the country. So if dealing with a local branch and being able to look into the eyes and shake the hand of the loan officer dealing with your application is essential to you, you may want to consider another lender. Just realize that the handshake, eye contact, and the free coffee at your local branch come at a price: higher rates and more significant fees.
FAQ on Quicken Loans
What does your credit score need to be for Quicken Loans?
If you opt to apply for a mortgage with Quicken Loans, you’ll need a minimum credit score of 580 (with a down payment of at least 3.5%) to qualify for an FHA loan. This is lower than the 600 minimum that most lenders require for FHA loans. 580 is the lowest score that falls into the “fair” credit score range. You’ll need a minimum credit score of 620 if you want a shot at getting approved for a conventional loan from Quicken Loans.
What kind of mortgage can I get with Quicken loans?
With Quicken, customers have quite a few options:
- Fixed-rate mortgage
- Adjustable-rate mortgage (ARM)
- Federal Housing Administration (FHA) loan
- Department of Veterans Affairs (VA) loan
- United States Department of Agriculture (USDA) loan
- Jumbo loan
- 1% Down Payment Option
Does Quicken loans have higher closing costs?
Government mortgages backed by the FHA, VA or the USDA may be slightly higher, but Quicken Loans says its lender fee won’t exceed 1% of the loan amount. This excludes discount points that you may decide to purchase to reduce your interest rate.
How long is Quicken Loans pre-approval good for?
This time limit varies from lender to lender, but at Quicken Loans, preapprovals are valid for 90 days. If you’re already working with a lender, it’s important to make your preapproval work for you.
Can you be denied a loan after pre-approval?
Even if you are pre-approved, your underwriting can still be denied. Being pre-approved will make sure you have a good credit score, verify your income, and assure that you will be able to pay back the loan amount. But again, pre-approval is only the first process to getting a loan.
Andrew is the managing editor for SuperMoney and a certified personal finance counselor. He loves to geek out on financial data and translate it into actionable insights everyone can understand. His work is often cited by major publications and institutions, such as Forbes, U.S. News, Fox Business, SFGate, Realtor, Deloitte, and Business Insider.