Rocket Mortgage is one of the largest mortgage lenders in the United States. They offer a wide range of mortgage products created to meet the various needs of homebuyers and homeowners. Among the products Rocket Mortgage offers, home equity loan is a popular option for individuals looking to leverage the equity they have built up in their home.
This type of loan allows homeowners to borrow a lump sum of money against the equity in their property. It can also be used for different purposes, like covering major expenses, home improvements, and debt consolidation. Rocket Mortgage is popular for its online application process, which gives borrowers the best experience with its quick decision-making and user-friendly platform.
On the other hand, if you have plans that you want to achieve, like paying for college, consolidating your debt, or improving your home, you can get cash faster without leaving a low interest rate on your first mortgage. In addition to this, Rocket Mortgage is an American mortgage lender that offers different types of loans to borrowers.
How a Home Equity Loan From Rocket Mortgage Work?
Rocket Mortgage offers home equity loans to borrowers who have a higher interest debt or need a lump sum. You get to pay back this money at a fixed rate over a given period. Besides, Rocket Mortgage home equity loans are usually fixed-rate loans, which means that the interest rates are also fixed.
Loan lenders have their own diverse ways of giving out loans. When you visit Rocket Mortgage to apply for a home equity loan, you’ll be paired with one of its home experts. The expert will then walk you through the application process and let you know if a home equity loan is the right option for you after disclosing your goals.
After finalizing the loan, you’ll get a one-time payment. The lowest amount you can get is $45,000 ($61,000 if you reside in Iowa), up to $350,000. After getting the loan, you should make plans for how to repay it. Unlike other lenders, Rocket Mortgage home equity loans have a fixed interest rate. In other words, the payment amount stays the same until it is paid off.
Rocket Mortgage Home Equity Loan Requirements
Rocket Mortgage home equity loan requirements are very similar to other mortgages’ requirements. However, the process will be different among lenders, but you need the following in general:
- A credit score of 680 and above.
- Low debt-to-income ratio.
- Proof of income.
- Loan-to-value ratio of 80%.
- Your previous payment history.
If you are able to meet and provide these requirements to your lender, depending on what they need, you can be able to secure a Rocket Mortgage home equity loan.
Pros and Cons
Before choosing to get or apply for a home equity loan, you should know the advantages and disadvantages. Weigh out both factors to determine what to do. So, here are the pros and cons of a home equity loan:
Pros:
- Easy to qualify for.
- Fixed monthly payments.
- Access to funds in a lump sum.
- Fixed interest rates.
- Multipurpose use of the funds.
- Longer terms.
Cons:
- Closing costs.
- You will have a second mortgage to pay.
- You will need to pay the full balance of the loan if you sell your house.
Is a Home Equity Loan for You?
If you are still debating whether a home equity loan is for you or not, I can help. Here are some situations when you need a home equity loan and what to consider before choosing if you want to go for a HELOC.
So, you need a home equity loan if:
- Your budget has some room.
- You do not have plans to refinance.
- If you need a lump sum.
- You have a higher-interest debt.
Find out if you meet the criteria to apply for a home equity loan from any lender, including Rocket Mortgage.
Factors to consider if you want to go for a HELOC:
- Credit score.
- Financial stability.
- Alternative options.
- Purpose of the loan.
- Fees and costs.
- Loan amount and limit.
- Interest rates and terms.
- Repayment plan.
- Equity and property value.
When you consider all of these factors, you will have no trouble choosing whether to go for a home equity loan or a HELOC.
How to Apply for a Rocket Mortgage Home Equity Loan
If you would like a Rocket Mortgage home equity loan, then applying for it is not a bad idea. Besides, the application process is quite similar to other mortgage loans. Hence, if you have analyzed your home equity and LTV ratio, calculated your DTI ratio, and checked your credit report, here are the next steps you need to follow:
- Visit their official website.
- Appraise your home.
- Calculate your debt-to-income ratio.
- Review your credit score.
Follow the prompts on the screen, and you can connect with an expert if you need assistance during this process.
Frequently Asked Questions
Can You Refinance a Home Equity Loan?
Yes, you can refinance a home equity loan if you have an old home equity loan and need funds for a new project. You can also do this if you would like to change your payment terms or benefit from low interest rates.
What Credit Score Do You Need for a Home Equity Loan?
The minimum credit score for a home equity loan is 620 and above, but it also depends on the lender of the loan. But do not be discouraged if you have a bad credit score because there are still available options for you to try.
Is Rocket Mortgage a Good Option?
Rocket Mortgage was formally recognized as Quicken Loans. They are recognized as a strong leader and the overall best when it comes to mortgage refinancing.
