For some consumers, meeting with a mortgage lender face-to-face provides a certain peace of mind. But the popularity of online mortgage companies like Rocket Mortgage, the country's largest home loan provider, shows that plenty of folks are perfectly comfortable applying for a loan outside of an office.
In May 2021, Quicken Loans announced that it was formerly changing its name to Rocket Mortgage, a subsidiary of the publicly-traded Rocket Companies (RKT).
- Rocket Mortgage is an online direct-lending platform for residential mortgages and home loan products.
- Rocket Mortgage was formerly known as Quicken Loans, but officially changed its name in 2021.
- Owned by Rocket Companies, Rocket Mortgage has grown to become one of the most popular mortgage lenders in America.
What Is Rocket Mortgage (Formerly Quicken Loans)?
If you're shopping for a new mortgage or trying to refinance via the web, it's important to realize that not all loan originators have the same approach. Whereas sites like LendingTree and Zillow act as lead-generators, sending your loan request to multiple mortgage providers, Rocket Mortgage is an actual lender.
Using a direct lender like Rocket Mortgage means you won’t receive an onslaught of emails from lenders trying to get your business. Your personal information gets into fewer hands, a big draw for privacy-minded customers. If you're looking for a quick way to compare rates from multiple lenders, however, you may want to try websites that feed your information to several lenders at once.
The Detroit-based company claims that it's the nation's leading mortgage lender, closing on $351 billion of home loans in 2021.
How Does Rocket Mortgage Compare to Traditional Loans
Rocket Mortgage is tailored toward borrowers who prefer the convenience of getting a loan from their home, or even their local coffee shop. However, the actual process of applying for and closing on a loan are actually quite similar to that of your neighborhood bank. With Rocket Mortgage you have the option to apply for a loan completely online. For those who do not prefer to apply online, they also have the option to work with a Rocket Mortgage Home Loan Expert. Rocket Mortgage then uses your financial information and employment status to determine the loan options and rates for which you qualify.
Before you close the loan, the company has to check your credit score, as well as verify that your income and employment information are correct and that 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 Rocket Mortgage 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 for these fees than you would with other lenders.
The Rocket brand is all about making the borrowing process easier, and its approach to closing on a mortgage is no exception. Customers can select when they want to close and where just by logging into their account. The company claims that it services 99% of the loans that it originates, so you're more than likely going to make your payments to Rocket Mortgage once you've completed your home purchase.
Consumers who like managing their own experience will likely opt to use Rocket Mortgage, an all-digital platform that the company introduced in 2015. Once you log on to the Rocket Mortgage website or app, you'll be asked to provide information about your finances as well as the type and amount of the loan you're trying to obtain. For many consumers, the company is able to pull pay stubs and bank statements directly from their financial institutions, eliminating the need to scrounge up those documents and send them over.
You can use the platform to see whether you're approved and to ask questions about your loan (though you can always pick up the phone, too). You can also log into Rocket Mortgage website or app to manage your account and update payment information once you close on the loan.
Pros and Cons of Rocket Mortgage
Unlike online marketplaces like LendingTree and Credible, consumers who use Rocket Mortgage are only dealing with one lender. That has its pros and cons. In the plus column, you won’t receive a barrage of emails from lenders trying to get your business. And your personal information gets into fewer hands, a big draw for privacy-minded customers.
On the other hand, it’s hard to know whether you’re getting the best rate if you don’t have several bids coming your way. Moreover, if you approach more than one direct lender to comparison shop, you could end up with more paperwork—and more queries to your credit report.
Rocket Mortgage markets itself as a more convenient alternative to traditional lenders—Rocket Mortgage is certainly a big part of that. The digital service lets you get in touch with a team member, check the status of your loan, and view information about the closing right from your mobile device.
Do homeowners have to sacrifice service when working with a banker in another part of the country? According to most industry sources, the answer is decidedly "no." J.D. Power, which ranks mortgage originators based on customer satisfaction, awarded Rocket Mortgage its top spot for the 11th consecutive year in 2020. It slipped slightly to the #2 spot in 2021. The company also receives 4.5 stars out of 5 on real estate site Zillow.
Who Owns Rocket Mortgage?
Rocket Mortgage (formerly Quicken Loans) is owned by Detroit-based Rocket Companies, Inc., a public company trading on the NYSE under the ticker RKT. In addition to its home loan business, Rocket Companies own a real estate search and referral platform called Rocket Homes; Rocket Auto, an automotive retail marketplace that provides centralized and virtual car sales support to online car purchasing platforms; and Rocket Loans, an online-based personal loans business. It also owns and operates several technology and ad-tech platforms around these businesses.
Is Rocket Mortgage the Same as Quicken Loans?
Yes, Quicken Loans officially changed its name to Rocket Mortgage in 2021. The Quicken Loans website is still functional; however, it redirects inquiries to the Rocket Mortgage platform.
Is Rocket Mortgage a Bank?
No. Rocket Mortgage is a direct lender that only deals in home loans and related products. It does not offer banking services such as deposits, nor payments services like credit or debit cards.
The Bottom Line
Over the years, Rocket Mortgage has built a reputation as a convenient way to get financing to buy a home. Still, it doesn’t hurt to do some shopping around to ensure a competitive interest rate.