Rocket Mortgage Home Equity Loan Review

Rocket Mortgage (formerly Quicken Loans) is the largest home lender in America, both in terms of dollars lent and number of mortgage originations. It offers cash-out refinancing and traditional home equity loans (HELOANs) and ranks second overall in J.D. Power’s 2023 U.S. Mortgage Origination Satisfaction Study. But is it the right fit for you?

This guide will help you answer that question. Read on to find our full analysis of Rocket Mortgage home equity products, including pros and cons, offerings and factors to consider before deciding.

Best home equity loans for second homes

Rocket Mortgage offers home equity loans for primary and secondary residences. The lender’s HELOANs could be right for you if you have a vacation home or investment property with equity you want to access. If you have a credit score of 740 or higher, you may be able to borrow up to 90% of your home’s equity even if you don’t live there full time.

Rocket Mortgage home equity loan pros and cons

Rocket Mortgage pros explained

Offers home equity loans for secondary residences

Rocket Mortgage’s home equity loans give you access to untapped equity in vacation and investment properties. This makes it possible to get the cash you’re looking for without the risk of a second mortgage on your primary residence. If the real estate market takes a downturn or you face unexpected future financial difficulties, the home you live in won’t be impacted.

Allows you to borrow up to 90% of your home equity

Rocket lets you borrow up to 90% of the equity you have built in your home. That’s 10% more than Chase and 5% more than Bank of America. If you need to borrow more, you may want to review how to build equity in a home before moving forward, as you’re unlikely to find a company that will let you borrow more than 90% of your equity.

Usually uses fixed interest rates so your payments remain consistent

When you take out a loan through Rocket Mortgage, you will usually have a fixed rate throughout the lifespan of the lending agreement. This keeps your monthly payments consistent and predictable, which could decrease your risk of future default.

Fully online application process

Rocket recommends you consult with one of their lending experts to determine whether a HELOAN, cash-refinance or some other loan type best fits your needs. Once you decide which you want, the lender’s application process allows you to fill out your financial information, upload documents and follow your application’s status online. You will be required to get an appraisal to determine the value of your home as part of your application.

Highly ranked lender for mortgage origination satisfaction in 2023

J.D. Power’s 2023 U.S. Mortgage Origination Satisfaction Study saw Rocket Mortgage rank second overall. Over 9,000 customers were polled for the report, which measures overall customer satisfaction across the following six factors:

• Communication
• Digital channels
• Level of trust
• Loan offering meets my needs
• Made it easy to do business with them
• People

To put this result into perspective, Fairway Independent Mortgage Corporation took home the top slot with a score of 776. Rocket Mortgage finished a close second with a score of 759. Citi, Prosperity Home Mortgage and Bank of America rounded out the top five with scores of 756, 748 and 747, respectively.

Rocket Mortgage cons explained

Has a minimum loan amount of $45,000

One downside to Rocket Mortgage is its $45,000 minimum loan amount. That may be more than you need, and if you borrow extra, you’ll have to pay more in interest.

Requires a FICO score of at least 680 to qualify

Rocket's HELOANs are not a good fit if you have a low FICO score. You need a minimum credit score of 680 and a debt-to-income ratio (DTI) of 50% or less to qualify for any home equity option from this mortgage lender. Plus, the percentage of home equity that you can borrow scales with your credit score, so even if you meet the lender’s minimum threshold, you may not be able to borrow as much as you want.

These are the loan-to-value ratios (LTV), a measure lenders use to determine how much they are willing to lend, according to Rocket’s credit score requirements:

• 680 score: up to 80% of your equity
• 700 score: up to 85% of your equity
• 740 score: up to 90% of your equity

If you have a low credit score and want to tap into your home's equity, other options may be a better fit. You can read this guide covering how to get a home equity loan with bad credit to learn more. Personal loans or debt consolidation loans can be other options as well.

Doesn’t offer home equity lines of credit (HELOC)

It’s not currently possible to get a HELOC with Rocket Mortgage. You’ll need to choose another lender if you want a home equity line of credit that you can draw against and repay on an as-needed basis.

Rocket Mortgage home equity loan offerings

You have two home equity options to consider with Rocket Mortgage: home equity loans and cash-out refinancing. Both types of loans will have common features, such as a fixed interest rate, monthly loan payments and a lump sum payout of the borrowed amount. There are differences you should be aware of, however. Here’s what each offers:

Home equity loans

HELOANs from Rocket Mortgage are second mortgages on your property, with loan terms set at either 10 or 20 years. Unlike your first mortgage, a home equity loan does not require a down payment. With this option, you’ll have two monthly mortgage payments and must pay off two separate loans to own your house outright. It also carries a higher interest rate than a cash-out refinance, so you pay more to borrow the money you need.

However, you can keep the same interest rate on your original mortgage when you take out a home equity loan. This could be beneficial if your current rate is favorable. Another advantage is that you can borrow more of your home’s equity when you choose a HELOAN. Rocket Mortgage allows qualified homeowners to borrow up to 90% of their home’s equity with an equity loan but only 80% with cash-out refinancing.

Homeowners use HELOANs for all kinds of purposes, from financing home improvements to consolidating high-interest credit card debt. This benefit of homeownership can help borrowers improve their personal finances.

Cash-out refinancing

Unlike home equity loans, cash-out refinancing replaces your current mortgage with a new one. You only need to worry about one monthly payment with this option. Some people use a cash-out refinance to pay off their current mortgage balance and replace it with a new loan that has a better interest rate.

You can also typically expect lower interest rates on your home equity lending agreement with a cash-out refinance. This is because your cash-out loan becomes your new primary mortgage and will be paid off first in the event of foreclosure. That lowers the risk for the lender.

However, there are two main downsides to this borrowing option. The first is that your loan repayment terms will change entirely. So, if you had a favorable interest rate on your original mortgage, it would be wiped clean and replaced by the interest rate of your new cash-out refinancing agreement. Moreover, you can only borrow up to 80% of your home equity with this option, compared to 90% with a HELOAN.

Rocket Mortgage home equity loan pricing

Rocket Mortgage will base your equity loan rates on your credit score and other personal details. You can visit the company’s website and input your information into the Rocket Mortgage home equity loan calculator to see what mortgage rates you may qualify for. Your rates may also change as the Federal Reserve adjusts its prime lending rates.

Also, consider home equity loan closing costs. The company doesn’t list these publicly, but according to Rocket Mortgage’s closing cost guide, it’s common to pay between 2% and 6% of the loan amount. This covers the cost of several services, including:

• Home appraisal fees
• Credit report retrieval
• Attorney costs
• Document preparation
• Origination fees
• Notary charges

For those who wish to circumvent the appraisal process entirely, check out our list of the best no appraisal home equity loans.

Rocket Mortgage home equity loan financial stability

Rocket Mortgage’s financial stability isn’t as good as it could be. Moody’s gives the company a Ba1 rating. This is right in the middle of its scale, which ranges from Aaa to C.

Rocket Mortgage home equity loan accessibility

Availability

Rocket Mortgage’s home equity loans are available in all states but Texas. The company also has a $61,000 minimum loan amount for equity loans in Iowa and doesn’t offer its higher-priced loan options in New York, although it doesn’t specify what those options are. The loan application process is easy and can be completed online.

Contact information

You can get in touch with Rocket Mortgage via live online chat or over the phone. The company’s live chat service is available Monday through Friday from 7:00 a.m. to midnight EST and on Saturdays and Sundays from 8:00 a.m. to midnight EST.

You can call for help with an in-process or closed loan at (800) 603-1955, Monday through Friday from 8:30 a.m. to 9:00 p.m. EST and Saturday from 9:00 a.m. to 4:00 p.m. EST. If you need to discuss a new loan, you can call (888) 452-8179, Monday through Friday from 7:00 a.m. to midnight EST, Saturday from 9:00 a.m. to 8:00 p.m. EST and Sunday from 9:00 a.m. to 7:00 p.m. EST.

User experience

Rocket Mortgage’s user experience is in line with what you’d expect from a company offering one of the best home equity loans of 2024. It has broad customer service hours and mobile apps for iOS and Android devices. The company’s website also has many articles to help you learn more about your home equity loan options.

Rocket Mortgage home equity loan customer satisfaction

Customer satisfaction is a highlight for Rocket Mortgage. It’s the top-rated mortgage lender for customer satisfaction in the latest J.D. Power polls. It also has an A+ rating with the Better Business Bureau (BBB).

How we evaluated Rocket Mortgage home equity loans

Our methodology for this Rocket Mortgage home equity loan review included consideration of each of the following factors:

• Eligibility criteria: We considered how easy it would be for borrowers with different credit profiles to procure HELOANs from Rocket Mortgage.

• Home equity loan options: We examined the provider's number of equity loan options and the flexibility of each.

• Ratings from independent third-party organizations: We looked at ratings from trusted third-party organizations such as Moody’s and J.D. Power to look objectively at the company and its loan products.

• Loan amounts and availability: We considered the range of equity loan amounts offered and their availability across the U.S.

These factors may not be all that matters to you as you search for the right home equity loan provider. If you have other considerations in mind, you may need to conduct further research to make your decision.

Summary of Money’s Rocket Mortgage home equity loan review

Rocket Mortgage (NMLS #3030) home equity loans are highly rated for customer satisfaction and are available for investment and vacation properties in addition to primary residences. Rocket Mortgage doesn’t offer home equity lines of credit (HELOCs), and its eligibility criteria make it unsuitable for those with a low credit score. However, it may be the right lender if you’re looking for a large HELOAN or cash-out refinance.