Quicken Loans hopes to disrupt the mortgage market with their new Rocket Mortgage. Learn what it is and how you can get a home loan in just 10 minutes in our Rocket Mortgage review.
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For years, Quicken Loans has prided itself on being the best online mortgage broker in town. Its simple application process has helped it grow into one of the largest mortgage companies in the business, accounting for 6% of the mortgages in the United States.
That puts them right behind banking giants like Wells Fargo and Chase in the race to control mortgage market share. Not bad for an “online” broker.
Even with all of their success, the Quicken Loans application process has never been a fully online experience. Yes, potential borrowers started the application process online. But as with every other mortgage company, submitted applications were given to a loan officer who then guided the applicant through the process. That’s how it has always worked…until now.
Enter Rocket Mortgage, Quicken Loans’ answer to the modern demand for fully online transactions. Now, mortgage applicants can close the entire loan application process without ever having to talk to another human being. That’s a pretty impressive undertaking, and it could totally change the way Americans apply for mortgages. In fact, Dan Gilbert – founder of Quicken Loans – recently told TechCrunch that he believes Rocket Mortgage will be a disruptor in the home financing space similar to how the iPhone disrupted the cell phone market. When you take a look at the product, it’s hard not to believe his hype.
How Rocket Mortgage Works
Rocket Mortgage is changing the game for mortgage applications. It automates the verification process, eliminating the need to send all of your banking information to a human being (typically multiple times). As somebody who has applied for several new mortgages and refinanced a handful of others, I can see how this new process could be a gigantic stress reliever and time saver. Honestly, I can’t believe that it’s taken so long for a mortgage broker to go this route.
See also: How to calculate the true value of a mortgage refinance
Instant access to your bank records is impressive. But the most important feature of Rocket Mortgage is its ability to approve new loans at lightning speed, eliminating the waiting period for the borrower. Rocket Mortgage can approve applications in less than 10 minutes! That is incredible, and a huge reason that this process could be extremely successful.
The interface is simple and straightforward, as is the application process itself. Rather than simply throwing hard to understand raw forms on the screen for you to fill out, Rocket Mortgage makes it easy by asking you a series of questions. Your answers to those questions will determine how the rest of the interview goes. Much like a modern tax program, Rocket Mortgage then imports your answers to the proper forms.
The process starts by asking whether you are buying a home or refinancing an existing mortgage. Depending on which button you select, the rest of the process is customized to fit that goal. Borrowing from automated financial tools like Empower and Betterment, Rocket Mortgage will ask you to link your financial accounts to their program. This allows them to check your financial statements online without you having to send them the physical copies of your banking information.
After entering all of the relevant information, you are able to see a complete “real-time” itemization of your fees, interest rates, and projected payment. Through a simple set of sliders, you can adjust the length of your loan or “buy points” to decrease your monthly payments. When you’re happy with what you see, hit the submit button to lock in your rate and send your application off for immediate approval.
(Personal Capital is now Empower)
Rocket Mortgage Pros and Cons
Entirely Online — The entire application process can be completed entirely online without ever talking to another human being.
Approval in Minutes — Because Rocket Mortgage asks you to connect your financial accounts, you can have your loan approved within a few minutes.
Real-time Transparency — After completing the questionnaire, you’ll be able to see how buying points or adjusting the term of the loan can affect your payment schedule through real-time information.
Close Within a Week — Your loan through Rocket Mortgage and Quicken Loans can close within a week, provided third-parties don’t slow down the process.
For as much as it is an advantage, not having the opportunity to talk to a human loan officer could potentially be a disadvantage as well. Because of the DIY nature of Rocket Mortgage, consumers may lose out by applying for a mortgage that isn’t necessarily the best choice for their situation. Qualified applicants usually have several mortgage options available to them. Since most consumers are not mortgage experts, this is certainly one area where a human loan officer could help steer their client in the right direction.
Will It Work?
At this point, we can only guess how the public will respond to Rocket Mortgage. While the benefits of the plan may be welcomed by some, some do-it-yourselfers are bound to make some costly errors. That’s going to create some very unhappy people, even if the fault is entirely their own.
It is possible that consumers may decide that they want more human interaction. These are huge sums of money we are talking about here. However, if you’ve ever applied for a mortgage, you’ve almost certainly prayed to be left alone by the mortgage company at some point during the process. So, my hunch is that consumers are going to love it.
It is far too early to know whether or not Quicken Loans’ huge gamble on Rocket Mortgage will pay off. Only time will tell if it truly disrupts the mortgage market as it is capable of doing. But, in this age of increasing automation and demand for more customer control, it looks like Rocket Mortgage is a solid bet to come out a winner.