The mortgage market has been shifting over the past seven to eight years. While banks used to lend the majority of the money, now non-banks are giving them a run for their money. In fact, when looking at the top 10 largest mortgage lenders of 2016, five of them are independent mortgage companies.
Of the non-bank lenders, Quicken Loans has led the way with loanDepot also joining the top ranks. Here, we will take a deeper look at these two leading lenders alongside Veterans United, a nonbank lender that specializes in VA loans.
You’ll discover the pros and cons of each to help you find the best option for your next move.
Quicken Loans Inc. is a mortgage lending company that was founded in 1985 (under the name Rock Financial) and is currently the largest online retail mortgage lender in the U.S. It offers a range of mortgage products as well as personal loans.
Chris Aldridge, a representative from DRI Fund, says, “There are two emerging segments for non-bank lending. The first segment includes companies that serve the prime conforming market and compete with banks. Quicken Mortgage is one of the largest. It relies on technology to speed up the lending process and generates huge profits through smaller margins and huge scale.”
Quicken Loan Products
Here’s the rundown of Quicken’s loan products:
- Adjustable-rate mortgages (ARM): ARMs start out with a fixed interest rate which converts into an adjustable rate after a set amount of time. Quicken offers five-, seven-, and 10-year options with as little as a 5% down payment required.
- Fixed-rate mortgages: A fixed-rate mortgage has an interest rate that stays the same for the entire length of your loan. Quicken offers 15- and 30-year options.
- FHA loans: Home loans backed by the Federal Housing Administration are available and have flexible loan requirements with down payments as low as 3.5%.
- VA loans: Loans backed by the U.S. Veteran Affairs Department are on-offer and provide veterans with as little as 0% down on a home.
- USDA loans: Quicken Loans also offers USDA loans, which are backed by the U.S. Department of Agriculture and offer 100% financing on homes in rural areas.
- Jumbo loans: Large loans (up to $3 million) are available if you want to buy a home over the conforming loan limits.
- YOURgage loans: Short for “your mortgage,” YOURgage is a program offered exclusively by Quicken. It lets you customize your mortgage loan term, setting it between eight and 30 years. Interest rates are fixed, and financing is up to 97% of the home’s cost.
- Home Affordable Refinance Program(HARP): Quicken also offers HARP, a program created by the Federal government to help homeowners refinance their home, even if you owe more than your home is worth.
- Reverse mortgages: Loans are available for individuals over 62, and it works by converting a portion of your home’s equity into cash.
- Personal loans: Personal loans range from $2,000 to $35,000, and you can borrow for either 36 or 60 months.
Quicken helps to match applicants to a loan that fits their needs, offering support online and over the phone.
Quicken Loans Rocket Mortgage
Speaking of online support, Rocket Mortgage is the online lending branch of Quicken Loans. You can use it to apply for a mortgage or a personal loan, cutting out the tedious paperwork and wait time.
Quicken Loan Rates
As for rates, Quicken Loans offers fixed and variable rates, which vary based on market conditions, the term of the loan, the type of loan, and your creditworthiness. To find out what you qualify for, head over to the website and apply.
Quicken Loans Reviews
Quicken Loans’ primary mortgage department has won the award from J.D. Power and Associates for the “Highest in Customer Satisfaction in the U.S.” for eight consecutive years, and its mortgage servicing department has won it for four consecutive years. The company services 99% of its loans directly, which helps to guarantee the same service throughout the life of the loans.
Quicken focuses on quick, online lending through Rocket Mortgage. So, if you prefer face-to-face interaction, this probably won’t be the best lender. But you can rely on their customer service to help you through the process.
Quicken Loans Pros and Cons
Compare the pros and cons to make a better decision.
- Fully online application
- Mortgage advisors available
- Wide variety of loan products
- Get a decision in minutes
- Custom fixed-rate mortgage option
- Great reputation for customer service
- No home equity loans or lines of credit
- Stricter approval guidelines than some other lenders
- No brick-and-mortar branches
Next up is loanDepot, which was launched in 2010 by lending-industry veteran, Anthony Hseih. It has quickly earned the place of the second largest nonbank consumer lender and the fifth largest retail mortgage originator in the U.S.
It offers personal, home, and home equity loans, and focuses on emerging financial technology. Further, it has over 180 brick-and-mortar locations across the U.S.
loanDepot Loan Products
Loan Depot’s loan products include (note that these rates are just an example and could change at any time):
- Adjustable-rate mortgages: loanDepot offers a wide selection of Interest rate caps are in place to limit how high the rate can go and down payments can be as small as 5%.
- Fixed-rate mortgages: Fixed rate mortgages are available for 10, 15, 20, and 30 years with as little as 5% down.
- VA loans: Insured loans for veterans with 100% financing are available.
- FHA loans: Insured loans with down payments as low as 3.5% are also on offer.
- Jumbo: You can borrow up to $2 million to purchase or refinance a home.
- HARP refinancing: Refinancing for buyers with little-to-no equity is available.
- Home equity loans: You can get loans to cash out up to 90% of the equity in your home (up to $250,000).
- Personal loans: Unsecured personal loans are available in amounts from $5,000 to $35,000.
loanDepot advises customers to read the loan information available on its website to understand the products. Then, if you need further assistance, you can call the home buying experts at 1-888-337-6888 or go into a branch.
loanDepot Online Services
loanDepot enables you to apply for a home, home equity, and personal loan on the website. You will need to fill out several forms and upload documents as part of the process. Once you are a customer, you can also make your payments online.
Rates Offered by loanDepot
Interest rates vary depending on the loan product you choose and your creditworthiness. If you are considering loanDepot, it’s best to apply for pre-approval and then compare the rate you get to pre-qualification offers from other lenders.
loanDepot has done fairly well in the reviews department with past clients who claim low interest rates and good customer service. Read reviews here.
Pros and Cons of loanDepot
Compare the pros and cons to make a better decision.
- Origination fees on the first loan only
- Home equity loan options
- Wide range of loan products
- Advanced technology to ease the loan process for customers
- Easily apply online
- Operates in all 50 states online
- Competitive interest rates
- Good customer service
- More fixed-rate loan term options
- Does have over 180 physical locations across the country
- Limited brick-and-mortar locations may not be able to serve all customers
- Jumbo loans limit less than Quicken
- Personal loan minimum is higher than Quicken
- No reverse mortgage product
Lastly, Veterans United has been in business since 2002 and focuses on home loans backed by the U.S. Department of Veteran Affairs (VA). It has a team of specialists in the industry who undergo extensive training on VA eligibility and the VA loan process. It seems to be working well, as the company provided more VA Home Purchase Loans than any other lender in 2017.
Veterans United Loan Products
As mentioned above, Veterans United specializes in VA loan products. These include the following:
- Veteran Affairs home loans: Loans for home buyers with 100% financing and no requirement for mortgage insurance.
- VA Cash-Out Refinance: An option for those with VA or conventional mortgages who want to cash out some of their home equity.
- VA Streamline Interest Rate Reduction Refinance Loan (IRRRL): A program for those with a VA loan who can save on their interest rate by refinancing.
It also offers other loan types including FHA, USDA, and conventional loans. You can get a quote on any of these loans on the Veterans United website.
Veterans United Rates
Being that VA loans are government-backed, they usually come with competitive interest rates that are lower than those offered with a conventional mortgage. However, your creditworthiness, debt-to-income ratio, and loan duration along with the current market will influence the rate you get. You can quickly and easily get a quote on the website to find out which rate you will qualify for.
Veterans United Reviews
What are people saying about Veterans United? In 2017, the company received its 100,000th customer review and had a 97.7% customer rating. Read real-user ratings on SuperMoney’s Veterans United Review page.
Veterans United Pros and Cons
Compare the pros and cons to make a better decision.
- Experts in VA loans
- Strong reputation for customer satisfaction
- 24/7 customer service
- Prequalify online and complete the application over the phone
- Lighthouse credit program helps those who don’t qualify to repair their credit
- Has a client advocate team composed of individuals who were previously enlisted in different branches of the armed forces
- Serves all 50 states
- Offers other loan options as well
- Only has branches in about half of the 50 states it serves
- No home equity loan or credit line products
- May not have the lowest interest rates
Each of these lenders has earned its keep as an industry-leading, non-bank lender. They each have their strengths and weaknesses, though.
Quicken Loans is the leading lender with an outstanding record of client satisfaction. It has streamlined the online application and approval process, making it much easier to get a mortgage. However, it falls short when it comes to physical storefronts for people who want an in-person experience. Further, it doesn’t offer home equity loan options.
On the other hand, loanDepot does offer home equity loans and more branches across the country but doesn’t have quite as positive of a record with client satisfaction. Further, its loan limits aren’t as expansive as Quicken, and it doesn’t offer reverse mortgages
Lastly, Veterans United offers stand-out support and service to service members. You can speak to a member of the client advocate team with experience in the armed forces who will understand your needs. Customer service is available 24/7 and, if you can’t qualify, the Lighthouse Program can help you repair your credit so you will get on the road to approval. However, if you aren’t a veteran or want a loan type other than a VA loan, this likely won’t be the best route.
Shop around to find the right fit for you
One common thread between all three of these nonbank lenders is that you can get pre-approved online. This is good news for consumers because it means you can easily shop around without ever getting up from your couch.
If one of these companies sounds like a good fit, find out what they will offer you, but don’t stop there. Browse a few other lenders and get quotes. By doing so, you will be able to find the one that will actually be the best fit for your specific situation.
Jessica Walrack is a personal finance writer at SuperMoney, The Simple Dollar, Interest.com, Commonbond, Bankrate, NextAdvisor, Guardian, Personalloans.org and many others. She specializes in taking personal finance topics like loans, credit cards, and budgeting, and making them accessible and fun.