Quicken Loans: Pros and Cons

PROS

Generally speaking, there are three main areas where Quicken excels: variety of mortgage products, customer satisfaction, and online service. Quicken is also first in the country in mortgage originations by volume, according to the Mortgage Bankers Association (MBA). Quicken’s wide variety of loan products include conventional fixed-rate mortgages, government-backed VA, FHA, and USDA loans, and refinancing. In terms of customer sentiment, J.D. Power has ranked Quicken highest in mortgage origination satisfaction for 10 consecutive years. Finally, Quicken’s simple mortgage application process can be completed with any of their representatives over the phone or through its Rocket Mortgage online service.

CONS

Quicken will fall short for potential borrowers who prefer face-to-face interactions. The company does not have physical branches, so customers will need to complete mortgage processes online or over the phone. Further, although Quicken Loans does offer a wealth of mortgage products, they offer less options when it comes to tapping into your home’s equity. Aside from cash-out refinance, Quicken does not have home equity loans, HELOCs, and reverse mortgages. Quicken could also do more to mention their fees, as these are not readily available on their website.

Quicken Loans Review

Company Information

What started out as a brick-and-mortar operation evolved into the nation’s largest online mortgage lender. The Detroit-based Quicken Loans was originally founded in 1985 as Rock Financial and later changed its name to Rock Financial Group. During the 1990’s the company started to focus more on online lending and, after rebranding in 2000 as Quicken Loans, it steadily rose in prominence. Today, Quicken Loans is the nation’s largest mortgage lender by volume.

Quicken Loans Products

Quicken Loans boasts a bevy of mortgage products for purchase or refinance that include conventional and government-backed loans. Among them you’ll find:

Fixed-rate mortgages - Available in terms of 15 and 30 years, Quicken's fixed-rate mortgages are the standard in the industry. Determining which term is better for you will depend on your situation, and it is always advisable to consult a mortgage professional before deciding. Quicken Loans requires a minimum down payment of 3%, a maximum DTI ratio of 50%, a minimum FICO score of 620, and enough cash to cover closing costs that might be between 2-6% of the purchase price. Mortgage insurance may be avoided by putting down 20% or more.

FHA loans - Issued by the Federal Housing Agency, FHA loans are usually more accessible to a wider variety of borrowers because of their less stringent requirements. They can be fixed- or adjustable-rate for either 15- or 30-year terms. Quicken Loans considers a minimum FICO score of 580 for FHA loans and down payments can be as low as 3.5%. These loans do require an upfront mortgage insurance premium to be paid, typically 1.75% of the loan amount. Further, FHA property requirements establish that the home must be the primary residence, must meet their minimum property standards, and you’ll need to move in within 60 days of the mortgage closing.

VA loans - Backed by the Department of Veterans Affairs, these loans require a minimum FICO score of 620 but carry multiple benefits for qualified service members, veterans, and their spouses. Borrowers won’t need to pay mortgage insurance and could avoid any down payment at all. Further, DTI ratios are higher than conventional loans, up to 60%. Of course, you will need a Certificate of Eligibility from the VA that confirms you meet their guidelines, but Quicken Loans can help you apply for one. Nonetheless, the property must be used as the primary residence to be eligible for a VA loan.

USDA loans - These 30-year fixed-rate mortgage loans require a minimum FICO score of 640 but do not require a down payment, though it does require a monthly guarantee fee similar to mortgage insurance. However, to qualify for these types of loans, the properties must be in eligible rural or suburban areas as designated by the US Department of Agriculture. An appraisal must also find that the condition of the home meets USDA standards such as functioning water, heating, and electrical systems, structural soundness, and accessibility from a paved road.

Jumbo loans - The current limits that Quicken Loans offers for these non-conforming loans are between $510,400 and $2,000,000. Although a jumbo loan through Quicken requires a minimum 20% down payment, mortgage rates are typically lower than conventional loans.

YOURgage loan - This option allows you to choose a custom term between 8 and 29 years with a fixed mortgage interest rate. To qualify for a YOURgage loan you will need a minimum down payment of 3%, a minimum FICO score of 620, a maximum DTI of 50%, and enough cash to cover closing costs, which can range from 2-6% of the purchase price. Borrowers who put down less than 20% might be required to pay primary mortgage insurance (PMI).

Quicken Loans also has varied refinancing options for borrowers looking for a lower mortgage rate. Cash-out refinance can be used to pay off higher-interest debt or for home improvements that can raise the home’s value. Borrowers with investment properties can also take advantage of refinancing opportunities to buy additional property.

Quicken Loans Customer Service

Even though Quicken Loans excels in their online experience with their Rocket Mortgage service, what really sets it apart from other mortgage lenders is its industry-leading customer service. In J.D. Power’s yearly Mortgage Origination Satisfaction Study, Quicken Loans has taken the top spot for an unprecedented 10 years in a row. This level of customer satisfaction goes a long way towards securing repeat business, which might explain Quicken’s position as the top refinancing option.

This could also explain the comparatively low number of complaints that customers have presented against Quicken Loans with the Consumer Financial Protection Bureau (CFPB).

How Easily is Quicken Reached?

Since Quicken Loans is primarily an online lender, we wondered how easy it was to contact them by phone should you require assistance with your mortgage process. Although customer representatives are not available 24/7, they offer service hours from 8:00 a.m. to 10:00 p.m. on weekdays, with limited hours on the weekends. However, an online chat service is also available during extended hours.

Quicken has two different phone lines: one for new loans and general customer service, and another for customers already navigating the mortgage process.

When we called both, there was no wait at all before a customer service representative answered. Further, the menu is detailed and clear, offering to redirect for specific loan issues, Spanish language options, and the ability to call an extension directly if you need to contact your loan officer.

Quicken Loans Fees and Services

Quicken Loans’ fees are not plainly stated on their website. But by searching around, you can find that origination fees can be between 0.5-1% of the loan amount, with total closing costs ranging from 3-6%. This will vary depending on the type of loan you get.

The Quicken Loans deposit is a good-faith gesture required by the lender, wherein clients deposit an initial amount to cover the costs of the application process, which can include appraisals, credit reports, and processing fees for underwriting or outside companies. This amount can be anywhere from $400 to $750 and can be paid by credit or debit card, as well as VISA or MasterCard gift cards. If the application proceeds and closes, you would have the full amount applied to your closing costs. If, for any reason, the application is denied or you decide not to complete the process, you’d receive the refund minus any outside costs Quicken Loans had incurred.

There are other types of fees that customers can avoid.

Corporate advance fees are when the lender has to cover service-related expenses on behalf of the customer. For example, if your payment was for less than the amount owed, Quicken Loans will make up the difference and charge you later. Though it can potentially save a borrower from missing a payment, and Quicken Loans states that they do not charge interest on the amount they put up, customers could opt to enroll in auto-payment. This way, whatever amount is due will be paid fully without having to incur in corporate advance fees.

Loan recast fees appear when borrowers pay a lump sum directly towards the loan principal and a new monthly payment has to be calculated. Although some lenders can charge exorbitant amounts for this, Quicken Loans only requires a $250 fee. Borrowers should consider refinancing if they’re looking to reduce their monthly payments, though in some cases paying this recast fee can be worth it if you reduce the number of payments you have to make before the loan is paid off completely.

Late payment fees occur when customers miss their monthly payments. Most mortgage payments are due at the first of the month, but lenders typically have a grace period of 14 days in which you can complete the payment without incurring tardiness. Late fee amounts will depend on the lender and Quicken Loans does not stipulate exactly how much their late fees are, although that information will be explicitly stated in your loan agreement. It can usually be between 4-6% of the monthly payment amount.

Quicken Loans FAQs

Is Quicken Loans completely online?

Yes and no. Although securing a mortgage rate through Quicken Loans can be done over the phone, it also has an online presence with Rocket Mortgage by Quicken Loans. Rocket Mortgage offers everything Quicken Loans does but does so exclusively online.

Does Quicken Loans have physical branches?

No. Quicken Loans services its mortgages either by phone or through its Rocket Mortgage online service.

Is Quicken Loans a bank?

Quicken Loans is an independent mortgage company and, as such, is a non-depository institution. This means that it provides loans to individuals or businesses, but does not work with fund deposits.

Does Quicken Loans sell its mortgages?

As most lenders do, Quicken Loans sells its mortgages to mortgage investors such as the government-sponsored entities (GSEs) Fannie Mae and Freddie Mac, as well as the federal government with the USDA, VA, and FHA.

However, this does not end your relationship with the lender. Quicken Loans services 99% of mortgages it originates, even when they technically sold it. That means that Quicken is still the entity that collects your monthly payments (which could include mortgage insurance, homeowners insurance, and property taxes if applicable) as well as providing customer service.

Does Quicken Loans offer a mortgage rate lock?

Quicken Loans offers mortgage rate locks with its RateShield Approval. This service locks the initial mortgage interest rate up to 90 days on fixed-rate loans such as a 30-year conventional, FHA, and VA. Locking up a low rate can provide savings, especially during volatile market periods where mortgage rates can be in constant flux.

Summary and Important Takeaways

When it comes to comparing mortgage rates and choosing a mortgage lender, Quicken Loans offers most anything borrowers are looking for. Customers can find a varied selection of loan products to fit their needs. A comprehensive and informative website provides novices with the right tools to navigate the mortgage process. The Rocket Mortgage online experience offers a quick and straightforward way to apply for a loan. And Quicken Loans’ unparalleled customer service can provide the support and satisfaction borrowers look for in their lenders.