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Comparing Rocket Mortgage vs. Your Local Bank for Mortgage Loans

Rocket Mortgage vs. Your Local Bank for Mortgage Loans: An Overview

Since the dot-com boom of the late 1990s, online mortgage companies have become an increasingly significant force in the home loan industry. Leading the charge is Rocket Mortgage, now the largest retail mortgage lender in the country. Rocket Mortgage was previously called Quicken Loans, but changed its name in May 2021 to align with its parent company Rocket Companies.

Does the growth of players like Rocket Mortgage, which offer an automated approval process through its platform, mean web-based firms have more to offer than your community bank down the street? Not necessarily. Where you go for a loan is largely a matter of what is comfortable for you—and where you can get the best rates.

Both types of lenders offer mortgage pre-approval. Being pre-approved can sometimes help you have your offer on a home accepted. However, there are other significant differences between them that could shape which one you find preferable.

Key Takeaways

  • In recent years, online lender Rocket Mortgage has become known for convenience and strong customer service.
  • If meeting with lenders face to face is important to you, a local bank with a good reputation is a sound choice.
  • Local banks may also have better rates or lower fees than online options do.
  • Both types of lenders offer mortgage pre-approval.
Rocket Mortgage vs. Local Bank

Investopedia / Sabrina Jiang

Rocket Mortgage

Going with an online lender offers certain benefits, especially if you are someone who likes to feel in control of the loan process. The advantages of going with a company such as Rocket Mortgage include:

  • Convenience: Since the advent of the internet, Americans are used to doing things on their own timetable. With lenders like Rocket Mortgage, you can start the process by chatting online or talking on the phone. And by using Rocket Mortgage, you can apply for a loan on the Internet at any time of the day. Going with a digital lending solution is especially handy for those who work long hours and have trouble finding time for personal projects during traditional business hours.   
  • Speed: The company once boasted that Rocket Mortgage users can get approved for a loan in as little as eight minutes, after plugging in some personal information on a computer or mobile device. There is no need to upload documents manually.
  • Anonymity: Some people prefer to meet with their lenders face to face, but that is not true for everyone. In fact, many customers like the anonymity of electronic communication, which sometimes makes it easier to open up about one’s financial situation.
  • Selection: Bigger mortgage companies often provide a broader menu of financial products. Rocket Mortgage is no exception. In addition to conventional fixed- and adjustable-rate mortgages, the company also offers specialized products such as the Federal Housing Administration (FHA) and Veterans Administration (VA) loans. Of course, some community banks offer these as well, but it is not always the case.

When using an online lender like Rocket Mortgage, when your loan closes, it will almost always be sold to another company for servicing. This means that you will have no control over what company will end up holding your mortgage and to whom you will end up making your payments. Though some local banks do sell mortgages to other companies for servicing, the likelihood of that happening is much lower than with an online lender, wherein it is a virtual guarantee.

A Local Bank

When it comes to big financial decisions, some people just feel more at ease doing business in person. With Rocket Mortgage, you are talking to someone working out of a call center that might be in a different part of the country.

If you are the type of person who likes to look people in the eye and shake hands when getting advice, a local lender might be the best way to go.

Other advantages of going with a brick-and-mortar provider include:

  • Local expertise and connections: Smaller banks argue that there is an advantage to working with people who know the area and sometimes have an existing relationship with the real estate agent. This can put them in a better position to resolve conflicts during the loan approval process. That is not to say Rocket Mortgage does not do well by its customers. In fact, the company has earned J.D. Power’s top spot for client satisfaction for the eighth consecutive year. 
  • Simplicity: Most people lead busy lives, so there is something to be said for eliminating as many hassles as possible. For example, if you apply for a mortgage at your local bank, you might have the opportunity to manage all your accounts using a single login. That can make paying your monthly bill easier, too.
  • Local ties: When you make payments to a nearby bank, there is a good chance it will take that money and lend it to other individuals and businesses in the area. Smaller banks also tend to support local events and charities, thus bolstering the local community.

Comparing Requirements

Rocket Mortgage
  • Credit scores fair or above (as low as 500 for certain loans) and down payments


  • Debt-to-income ratio of 50% or less

  • 2+ years of verifiable income history

  • Property can be a single-family, multifamily, investment, or other non-traditional mortgage type

  • Borrower can live (almost) anywhere

  • Down payments as low as 0% depending on loan type, credit score, etc.

Local Bank
  • Credit scores good or above (varies)

  • Debt-to-income ratio of 40% or less (varies)

  • 2+ years of verifiable income history

  • Property must be a single-family home intended to be a primary residence (varies) in the area the bank serves

  • Borrower usually must live within a certain area near the bank

  • Down payments above 10% (varies)


Rocket Mortgage offers a much wider variety of loan products than the average local bank does and has much more flexible requirements as a result. Though it can be possible to find a local bank that can work with your particular situation, expect to have to shop around more.

Is Rocket Mortgage the Same as Quicken?

Yes. Rocket Mortgage used to be called Quicken Loans. However, the corporate name was changed in May 2021 so as to be consistent with the name of its parent company, Rocket Companies. 

Is Rocket Mortgage a Broker or a Lender?

Rocket Mortgage is one of the largest mortgage lenders in the U.S., offering a wide choice of both purchase and refinance options. It is an online lender.

What Bank Is Behind Rocket Mortgage?

Online mortgage lender Rocket Mortgage is not run by a bank, but by parent company Rocket Companies.

The Bottom Line

Regardless of whether you choose a local bank or an online lender like Rocket Mortgage, taking some time to do some rate shopping is always a good idea. Companies like Rocket Mortgage offer more products and are able to serve a wider variety.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
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  2. Rocket Companies. "Quicken Loans Announces It’s Changing Name to Rocket Mortgage."

  3. Rocket Mortgage. "Mint and Rocket Mortgage Introduce Fully Digital Mortgage Solution to Empower Home Buyers."

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  6. Rocket Mortgage. “Every Client, Every Time: Rocket Mortgage Named America’s Top Mortgage Servicer for Client Satisfaction by J.D. Power for 8th Consecutive Year.”