Rocket Mortgage Home Equity Loan March 2024

Does Rocket Mortgage Offer Home Equity Loans or HELOCs?

Rocket Mortgage does not currently offer home equity loans or home equity lines of credit {HELOCs). However, since the pandemic began, product line-ups in the mortgage industry have been highly changeable, and offerings are subject to change again at any time.

Rocket Mortgage and its affiliated companies provide two alternatives to home equity loans and HELOCs that might be useful in some situations. These alternatives are cash-out refinance loans and personal loans. 

Rocket Mortgage is based in Detroit, MI, but operates in all 50 states. They are part of a family of companies that provides mortgages and personal loans in addition to home and auto buying services. Rocket Mortgage was previously known as Quicken Loans. 

According to the company’s website, Rocket Mortgage is the largest mortgage lender in the United States. In 2020, they closed $320 billion worth of mortgage loans. 

Overall, the organization has 26,000 employees and operates offices in four different states. Its reach is nationwide, via what the company describes as “the first completely online mortgage experience.”

This online emphasis allows mortgage applicants to complete the entire process without dealing directly with salespeople or bankers. However, their system does provide access to lending professionals when desired.

Cash-out refinancing

Like a home equity loan, a cash-out refinance loan is a way of tapping into the equity in a home to get cash. However, rather than simply borrowing against equity, cash-out refinancing involves replacing the homeowner’s current mortgage with a larger loan. That larger loan allows borrowers to replace their existing mortgage and use the remaining cash for other purposes.

Cash-out refinance loans may be a better alternative to home equity loans in situations where the new loan’s interest rate is significantly lower than that of the existing mortgage and the amount of cash taken out is a large portion of the total amount borrowed. The reason this matters is that there are surcharges for cash-out refinancing, and they run between .375% and 3.125% of the entire loan amount – not just the cash out. A 3% fee on a $300,000 mortgage is $9,000. It doesn’t make sense if you’re just looking for $20,000 cash.

Cash-out refinancing may not be a cost-effective alternative to a home equity loan if the new interest rate is not substantially lower than the old one. That’s because the fees involved in getting a new mortgage might make this an expensive way of accessing home equity.

Personal loans

Another alternative offered by Rocket Mortgage is a personal loan. Personal loans may be secured or unsecured. “Secured” means they are backed by collateral, while unsecured loans depend more on the borrower’s credit history and financial situation. 

Personal loans generally have higher interest rates than mortgage loans. Some personal loan providers do offer rates that compete with those of home equity loans, if the borrowers are extremely qualified. And according to Federal Reserve data, personal loan rates are usually much cheaper than borrowing on a credit card. This means personal loans may be a cost-effective source of credit for borrowers who don’t have a substantial amount of equity in a home. 

Getting a personal loan depends greatly on the borrower’s credit history and financial situation. There are typically fees associated with initiating a loan, making personal loans less cost-effective for smaller amounts. 

Rocket Mortgage Home Equity Loan

Since Rocket Mortgage does not currently offer home equity loans, an alternative way of tapping into the equity in a home for cash is a cash-out refinance mortgage.

Rocket mortgage cash-out refinance loan

Here are some details on Rocket Mortgage cash-out refinance loans:

• In most cases, a new mortgage can be up to 80% of the home’s value or up to 100% if the borrower qualifies for VA refinancing.
• Interest rates are subject to change at any time and depend on each borrower’s credit history and financial situation. As of this writing, the best rates available from Rocket Mortgage range from a 3.475% APR for a 15-year conventional mortgage to a 4.225% APR for a 30-year FHA loan. 
• Rocket Mortgage’s minimum credit score for a cash-out loan is 620 for mortgages representing up to 80% of the home’s value, and 680 if the borrower qualifies for a VA mortgage of up to 100% of the home’s value.
• Generally speaking, loan limits are based on a percentage of the home’s value - 80% for conventional loans and 100% for VA loans.
• The debt-to-income ratio must be less than 50%. This is the sum of the borrower's current debts and regular payments divided by the monthly before-tax income.
• Loan terms are typically 15 or 30 years, though custom terms may be available.

Rocket Mortgage HELOC

HELOCs and personal loans can supply cash when borrowers need flexibility. Since Rocket Mortgage does not currently offer HELOCs, a personal loan from Rocket Loans might be a decent alternative for some borrowers.

Rocket Loans personal loans

Here are some details on Rocket Loans personal loans:

• Personal loans from Rocket Loans have APRs ranging from 5.97% to 29.99%, depending on the applicant’s credit history and financial situation
• To obtain the lowest rate, the borrower must sign up for automatic loan payments
• Loan amounts available are based on the borrower’s credit history and financial situation
• Loan term lengths range from 36 to 60 months
• Unlike a HELOC, personal loans deliver a lump sum – you can’t tap them like a credit line.

How to Apply for Rocket Mortgage Home Equity Loans

As noted previously, Rocket Mortgage does not offer home equity loans, but its cash-out refinance mortgages and personal loans may be considered as alternatives in some situations. 

Rocket uses an online application process for both mortgages and personal loans. 

In either case, the loan applicant will have to provide some personal information, such as name, address, Social Security Number, income, date of birth, and bank names and account numbers. Rocket may ask for additional information for verification purposes, such as pay stubs and income tax returns.

The applicant will be presented with suitable loan options based on this information. Once they’ve chosen one of these, Rocket will begin its detailed approval process.

Upon approval, money from personal loans may be made available as quickly as the same business day. Cash-out refinances involve the additional step of appraising the home’s value to make sure the loan-to-value ratio is within guidelines. 

Rocket Mortgage Expert and Consumer Ratings

The JD Power 2021 U.S. Primary Mortgage Origination Satisfaction Survey gave Rocket Mortgage an overall rating of 876 on a 1,000-point scale. This is well above the average industry rating of 851.

In addition, Bills.com compiled data from 10 different expert and consumer information sites. Ratings for Rocket Mortgage were available on nine out of the ten sites surveyed.

Rocket Mortgage earned an average 4.1 out of 5 stars based on this analysis.

This rating is based on a non-scientific sampling of opinions and, therefore, may not precisely reflect a firm’s capabilities. 

Rocket Mortgage Pros

• Rocket Mortgage and its affiliate Rocket Loans offer both cash-out refinancing and personal loans, so they have options available for both homeowners and non-homeowners alike.
• Consumer reviews frequently cited the ease of Rocket Mortgage’s online application process.
• Rocket Mortgage earned a solid overall average rating among reviewers of 4.1 out of 5 stars.

Rocket Mortgage Cons

• Rocket Mortgage does not offer home equity loans or HELOCs
• Borrowers who value a more personal approach may not view the highly-automated process as a positive

Home Equity Product Alternatives to Rocket Mortgage

Looking for other alternatives? Since Rocket Mortgage offers borrowing against home equity only in the form of cash-out refinancing, it might be a good idea to consider alternatives that offer home equity loans or HELOCs. Those products might be a better solution in some situations. Remember to compare lenders and pricing to get a good deal.