Rocket Mortgage Nonsense

[Anonymous]

Hi All,

I’m in the process of building a new home (ready to move in around January 2019) and applied to many places as my builder requires a pre-approval letter and 5% of the contract price to begin construction. Among the many places I applied to was Rocket Mortgage. First off, after I put in all my financial information and had it pull my credit it game me a very low approval amount...less than $100k. The home I’m building is $305k, so that’s a problem. As background I have a 720 mid FICO Mortgage score, plenty in savings for closing and reserves and only 2 accounts out of 31 reporting utilization. I have a total of about 240k in revolving credit lines, earn $105k annually in a government job with 16 years of continuous service. My DTI is 17% including my current mortgage (this home is under contract and will be closed at the end of May). So I passed on rocket mortgage and started working with PenFed.

The next day a representative from Rocket Mortgage called to talk over my application. He claimed to be their new construction specialist and wanted to see if I was still interested. I told him the numbers rocket mortgage was throwing at me simply don’t work. He reviewed the file and told me the $305k purchase price would be no problem. So I went along and listened to his pitch. He told me all about how an FHA program would be good for me and asked me what I wanted my monthly payment to be. That’s when this mortgage loan started to smell like a car dealership loan where they try to hook you with math related to monthly payments and not based on actual rates and costs. Then, after all that he tells me I need to pay them $500 as a “commitment” to work with them. I laughed and reminded him that this home won’t be built and ready for move in until January, 2019 and if I could find a better deal as I get closer to closing on it there’s a very real chance I won’t even use them. I told him all I wanted was a pre-approval letter and we get more serious as we got closer to closing. That’s when he insisted that I pay the $500 and even told me if I didn’t then this “deal” would expire at the end of the day. Needless to say, I told him I’d never pay $500 for a commitment and that I’d go elsewhere.

Got back with Penfed and got my pre-approval letter today and didnt have to pay some silly $500 commitment fee. Penfed was a breeze. All my financial/bank info was fed directly to them via website (like rocket mortgage) after my first consultation with a loan specialist and it went through underwriting within a day or two.

Not sure if others have dealt with rocket mortgage but I think asking people to pay a commitment fee is crazy...especially when your 9+ months away from moving into the place.

[avp99]

This is good information, I was considering using them... glad I read this review

[Anonymous]

Glad it helped. The entire conversation felt plastic/car sale like. He kept telling me how Quicken/Rocket are top tier lenders, conservative and service all the loans they make. I’ll never pay someone for a commitment...total scam.

[JVille]

Just stay away from the Internet Lenders! I can never understand why anyone would think it’s a good idea. Local lender is the best source.

BYW that $500 Fee would eventually have been used toward the Appraisal Fee. When you make a formal application you will pay a Application Fee/Appraisal. This is normal.

[Anonymous]

That is crazy! Good that you were smart enough to walk away.

I took a first-time homebuyers class back in January and they warned us there that some buyers won't accept bids from people using Rocket because they have a reputation for being shady and the current market is so competitive. I had never even heard of them but your experience seems to back that up.

[heyryan]

Sorry you had a bad experience with them. I think like most businesses, they have "good eggs" and "bad eggs" working there. I'm closing in a few days on a house, and I used Quicken/Rocket, and have been extremely happy. My mortgage banker was communicative, great about explaining things to a first-time homebuyer, and not pushy at all. I found the all-online process to be painless, and they turned around a fully underwritten preapproval in <24 hours. (By contrast, NFCU took over a week, and was way more expensive) When you're in escrow, they have you work with a 2nd person (banker is the numbers person, 2nd person is the documents person), and then finally the "closing team". It seemed odd to get passed around, but they were very good about keeping in contact throughout everything.

My agent did say that Quicken used to have a not-so-great reputation here, but she's worked with them a few times recently and has had good experiences, so maybe they're turning things around. I certainly wouldn't hesitate to recommend them to people after my experience. 

[homeloanexpert]

I can't tell you how many people call me with stories like that. I don't collect any fees upfront (excluding an appraisal fee once under contract on a purchase). I feel bad for folks, but I get lots of calls from people who got beat up by one of these internet lenders. Best wishes to you!

[Anonymous]

Be careful of PenFed.  Their initial pre-qual is quick, but their mortgage lending and underwriting staff is unbearably slow.

[Anonymous]

I went with a local lender and had so much trouble that eventually after the run around for 5 months I tried Quicken Loans.  I have been extremely pleased with them.  Granted there was a small hickup with the closing and seller consessions but it is working out.  I still keep in close contact with my beginning LO and she has been very helpful with getting information to me even though my loan is now with the closing team.  Now if the government would speed up I will be able to close on the house soon.  Been waiting now for almost two weeks for the government to get me the committment document.   One thing about Quicken is that unless you keep on top of things you won't notice if the loan has stalled.  I noticed mine had stalled and assumed it was due to my insurance premium and instead it was due to the deductible.  If I hadn't kept on top of this my loan would have probably been denied at underwriter. 

[VALoanMaster]

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@JVille wrote:
Just stay away from the Internet Lenders! I can never understand why anyone would think it’s a good idea. Local lender is the best source.

BYW that $500 Fee would eventually have been used toward the Appraisal Fee. When you make a formal application you will pay a Application Fee/Appraisal. This is normal.

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No offense Jville but this is an outdated concept. Do you know how many loans I "save" every month from a "local lender" all across the country? Try 3-5. I have real estate agents not only outside of my local market but also outside of my state refer their buyers to me. 

The location of your lender does not matter, it's the competency of the Loan Officer & their team that will make or break your transaction.