Our Thoughts on Rocket Mortgage Home Equity Loans
Previously known as Quicken Loans, Rocket Mortgage is the largest mortgage lender in the country. It offers home equity loans for primary or secondary homes, but not investment properties.
You can talk with a Rocket Mortgage expert anytime through the company’s online chat, and connecting with an expert to discuss your options is a simple process. However, as with other home loans, you’re on the hook for closing costs — usually 2% to 6% of the loan.
There’s no prequalification button to see if you’re eligible, but before you connect with an expert you’ll first complete a prequalification questionnaire. This helps you and Rocket Mortgage figure out if a home equity loan is the right fit for you.
Pros and Cons of Rocket Mortgage Home Equity Loans
Getting a home equity loan through Rocket Mortgage might be a good option for some borrowers, but it’s essential to weigh the pros and cons prior to committing to any lender.
Who Are Rocket Mortgage Home Equity Loans Best For?
Rocket Mortgage home equity loans might be a solid option for your needs if one or more of the following describes you:
- Your debt-to-income (DTI) ratio is 45% or less. Your debt-to-income ratio compares your monthly earnings to any existing loan payments, like a car loan or student loan
- You have at least a 680 credit score
- You’re looking to borrow at least $45,000
- You don’t mind selecting between a 10-year or 20-year loan term with no other flexibility
- You’ve talked to a Rocket Mortgage expert, discussed whether you’re eligible for a home equity loan and compared their offerings to other lenders
You may want to forgo a home equity loan from Rocket Mortgage if one or more of the following actively reflects your financial situation:
- You have a high DTI ratio
- You have a bad or fairly low credit score
- You don’t need to borrow too much for your needs
- You found other lenders who have more flexible repayment terms
How To Get a Rocket Mortgage Home Equity Loan
If you’re ready to start the home equity loan process with Rocket Mortgage, there are a few steps to take.
Application Process
Your first step is to complete a prequalification. Click the “Connect With An Expert” button and answer a few questions from the lender about your needs and eligibility. For instance, what home will the loan be used for and how much do you need?
After you chat with an expert and you’re a good match, you can complete your application online or over the phone. How much you get and your interest rate depends on your credit score, credit history and DTI ratio among other factors.
Approval and Funding
Like a traditional home loan, a home equity loan goes through underwriting once you submit your application. You can track your application process in your account online or through the mobile app.
Rocket Mortgage doesn’t publicly disclose how long the approval process takes or how long it takes for funds to hit your account.
Rocket Mortgage Home Equity Loan Reviews
Rocket Mortgage has mixed reviews from a few current and past customers. Most folks are happy with the easy online application, fast processing and excellent customer service for other products, including getting a mortgage or refinancing.
“Everyone involved was very knowledgeable and courteous. All my questions were answered, and I wasn’t pressured into any decision. Process was completed quickly, and most was online, making it also very easy for me.”
— Cynthia, Sept. 27, 2023, Trustpilot
Some negative comments mentioned the process taking longer than quoted and expected. Others said they were preapproved, only to pay an appraisal fee and then get denied.
“This refinance took more than three months to complete. Rocket requested three different appraisals because they didn’t understand our property (two houses on the same lot). In the end, we had to work with at least four different mortgage “specialists.” It just seemed like we got passed off every time a new question came up.”
— Christopher, Oct. 21, 2023, Trustpilot
“After being told I was good to go for a home equity loan I spent $500 for an appraisal, just to find out I wasn’t good for the loan. The people I dealt with didn’t seem to be very well trained and/or very good at their jobs. Long story short, I called Rocket Mortgage and lost $500. I wouldn’t recommend it.”
— JC C., Sept. 7, 2023, Better Business Bureau
While Rocket Mortgage has an A+ rating from the Better Business Bureau (BBB), it averages a 2.17 out of 5 stars from customer reviews on BBB.org. The lender averages 4.7 out of 5 stars on Trustpilot, however, with more than 19,000 reviews.
The lender did not respond to a request for comment.
Eligibility Requirements for Rocket Mortgage Home Equity Loans
Rocket Mortgage publicly discloses some of its eligibility requirements, but not all. Before you complete an application, first make sure you qualify.
Credit Score and Financial History
Your credit score and history are some of the most important factors when determining your eligibility. You’ll need to have, at most, a DTI ratio of 45% or lower. While you can qualify for a home equity loan with at least a 680 credit score, a lower credit score could impact how much you can borrow. The higher your credit score, the more likely you’ll secure the full amount you’re requesting. Past late payments or bankruptcies could impact your approval.
Home Equity and Loan-to-Value Ratio
Homeowners with at least a 740 credit score can borrow up to 90% of their home’s LTV ratio and will need to borrow at least $45,000 to qualify for a home equity loan from Rocket Mortgage.
Rocket Mortgage Home Equity Loan Usage Rules
While many people use home equity loans for home-related repairs and similar costs, it’s not required as part of the loan. Some use a home equity loan to consolidate high-interest credit card debt or pay school tuition. Rocket Mortgage says you can use the funds for anything.
Common uses for home equity loans include the following:
- Paying down and consolidating debt
- Repairing or renovating a home
- Remodeling or creating additions
- Paying for schooling — primary or secondary education
- Starting or funding a business
Rocket Mortgage Home Equity Loan Fees and Penalties
As with most home loans, Rocket Mortgage home equity loans come with some fees and without others.
Early Repayment Penalties
You can pay off your home equity loan from Rocket Mortgage early without facing prepayment penalties or fees.
Interest Rates and APRs
Annual percentage rates, or APRs, are the interest charges attached to borrowing plus any additional fees. Those fees can include an origination fee, broker fee, points or any other charges associated with the home equity loan. Home equity loans typically offer fixed-rate interest, while HELOCs often have a variable interest rate.
Rocket Mortgage doesn’t publicly list their interest rates or APRs for their home equity loans. The only way for you to get a personalized rate is to complete an application, which triggers a hard credit inquiry and goes on your credit report.
How Rocket Mortgage Compares to Other Lenders
Rocket Mortgage offers many mortgage and home lending products, but other lenders provide similar home equity loan products with different pros and cons.
Rocket Mortgage vs. PNC Bank
While you must borrow at least $45,000 from Rocket Mortgage to be considered for a loan, you can borrow as little as $10,000 from PNC Bank. You can also borrow upwards of $1 million from PNC, much more than the $350,000 limit from Rocket Mortgage. You can also get prequalified from PNC Bank, making comparing rates easier without triggering a hard credit inquiry.
Rocket Mortgage vs. Navy Federal Credit Union
Navy Federal offers a lot more flexibility compared to Rocket Mortgage. For instance, you can get terms ranging from as short as five years or as long as 20 years. You can borrow a minimum of $10,000 or as much as $500,000. Navy Federal also covers your closing costs and allows you to borrow up to 100% of your home’s equity if eligible. However, Navy Federal home equity loans are only open to members who are military servicemembers, veterans or employees of the Department of Defense. Immediate family of Navy Federal members are also eligible to join.
Rocket Mortgage vs. Guaranteed Rate
While Guaranteed Rate has an origination fee that impacts the total amount you’ll receive, the lender allows you to borrow up to $400,000. You can check to see if you’re eligible through prequalification and you’ll know within five minutes if you’ve been approved. Funding is disbursed to your account in as few as five business days — much faster than Rocket Mortgage.
The Bottom Line
With availability nationwide and a multitude of home-related lending products, Rocket Mortgage is popular for a reason. It has a relatively low barrier to qualifying for traditional mortgages and refinance options.
But the standards for their home equity line might prove too much for some. The minimum amount required to borrow and the DTI ratio could be too high, and the lack of current rates might also be a turnoff for potential borrowers. You can only see personalized rates if you complete an application.
Make sure to complete the prequalification and talk to a representative to assess whether you’re a good match before filling out a full application.
Frequently Asked Questions About Rocket Mortgage Home Equity Loans
You’ll need at least a 680 credit score to take out a home equity loan from Rocket Mortgage.
Past customers have noted that it can take a few weeks or upwards of a few months for the lender to disburse funds into your account. Similar Rocket Mortgage products, like a HELOC or traditional mortgage, can take 45 days to complete the process from submitting an application to closing.
Rocket Mortgage doesn’t publicly list their home equity loan rates. The only way to know what you’d be eligible for is to complete a full application.
When you complete a home equity loan application, lenders look at your credit score and history, income, DTI ratio and other factors during the approval process. Your income is one factor but not the only.
Editor’s Note: Before making significant financial decisions, consider reviewing your options with someone you trust, such as a financial adviser, credit counselor or financial professional, since every person’s situation and needs are different.
If you have questions about this page, please reach out to our editors at editors@marketwatchguides.com.