loanDepot is a mortgage company that makes home loans in all 50 states. It has physical branches, but you need never leave your home to get a mortgage here. The entire loan process can be handled digitally. loanDepot is also one of the largest VA mortgage lenders by volume, and borrowers who qualify for this low down payment mortgage program should find themselves in good hands here.
Read our full Our loanDepot mortgage review to decide whether loanDepot is the right lender for your next home loan.
Best for: Online application process
loanDepot
Rating image, 4.5 out of 5 stars.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.
Bottom Line
Among the most popular refinance and FHA/VA lenders in the market. Its mello smartloan™ platform eases the refinance process by digitally hooking up to confirm your assets, employment, and income.
Full loanDepot review
This mortgage lender is a good fit for: Qualified borrowers who are also current loanDepot customers. loanDepot can also be a great fit for veterans, as well as borrowers who need to make a low down payment.
Pros
- All digital application process
- Dedication to finding the right loan for you
- Online tools
- Perks for future loans
Cons
- No USDA loans
- Rates not published
- No home equity loan or home equity line of credit
Top perks
All digital application process
The mello smartloan™ is loanDepot's proprietary end-to-end digital home loan platform. The software digitally verifies income, assets, and employment. Then it identifies the loan options that save the most money, time, or both.
The platform doesn't just look at interest rates and closing costs. Other savings are immediate. You'll get other opportunities to save money, too.
For example, loanDepot will waive the appraisal on properties where there are enough recent comparable sales to automate the valuation. loanDepot says that for some properties, title clearance and home value approval can be ready in minutes. Borrowers can close on their loans up to 17 days faster than with a comparable loan made without the benefit of the mello smartloan™ technology.
"No steering" policy
loanDepot's loan officers are not mortgage brokers earning commissions. The lender has a strict "no steering" policy to ensure that borrowers are put in the right loan, not the loan that will earn the broker the most money. Employees are not incentivized to push one loan program over another. This offers some comfort to consumers who do not trust financial institutions to look out for their best interests.
Robust online calculators
A nice selection of mortgage calculators can be found on the loanDepot website. Without revealing any information about yourself, you can play around with the numbers.
The financial calculators are well-built and responsive. One helps you determine whether it's more cost effective to rent or buy in your area.
Another helps you evaluate the potential savings you could gain from refinancing. A special VA loan calculator has the funding fee built into the calculated payment. Links to the online calculators can be found in the footer on loanDepot's website.
Relationship perk
loanDepot makes a standing offer to permanently waive future lender and appraisal fees after your first loanDepot refinance. This lifetime guarantee is limited to subsequent refinances on the same property. Typical lender fees can easily be in the $1,250-$1,500 range and higher, so this offer can lead to significant potential savings.
What could be improved
USDA loans
With such a large variety already, it would be nice if loanDepot offered a fuller menu of government-backed loans, much like many of the best mortgage lenders. Some borrowers will qualify for multiple programs and may want to compare advantages. For example, the USDA loan does not require a down payment and has lower mortgage insurance premiums than the FHA loan. It could be preferable for borrowers who meet eligibility criteria for both programs.
Home equity products
loanDepot doesn't currently offer a home equity loan or home equity line of credit. Sometimes home equity options are good alternatives to a cash-out refinance. But if you want to compare products, you'll have to find those options elsewhere.
Transparency
loanDepot does not publish its mortgage rates. This is disappointing, especially since some of the links on the website are worded in a way that could lead you to believe you're about to discover loanDepot's actual current rates. Unfortunately, no real rates are listed. You have to complete a lengthy application to get any details. That's a big drawback, because revealing personal information puts you on loanDepot's call and email list.
Alternatives to consider
Bank of America publishes its current mortgage rates right on its website, and loan officers are happy to answer general questions by phone. The application process is online. Eligible current customers get discounts off their mortgage origination fee or the interest rate on their home equity line of credit. Bank of America offers affordable low down payment loans, FHA and VA loans, and many other options.
New American Funding offers an even wider variety of loan options, including the USDA loan. On some loans, New American offers a 14-day guaranteed closing, which is considerably shorter than the 42-45 days most studies cite as the industry average. Unfortunately, you do have to reveal your contact information to find out rates.
How to qualify
You can start the loan process right on loanDepot's website or app.
The required down payment for a mortgage from loanDepot will depend on the loan program you qualify for. If you are a first-time home buyer (or have not owned a home in the past three years), you might qualify for a 3% down payment loan. The down payment money can come from gifts, grants, or a down payment assistance loan.
For most loanDepot conventional loans, you'll need a 5% down payment. However, the FHA loan requires only 3.5% down, and the VA loan requires no down payment at all.
Most jumbo borrowers will need to make a down payment of at least 10%.
loanDepot doesn't publish its minimum credit score requirements. If you're applying for an FHA loan, your FICO® Score must be at least 580 with a 3.5% down payment. If you can make a down payment of at least 10%, the FHA allows for credit scores as low as 500 -- however, it's up to the lender whether to accept that credit score. For conventional loans, expect loanDepot to require a score of at least 620.
The majority of applicants need to have a debt-to-income (DTI) ratio that does not exceed 45%. However, like most major lenders, loanDepot offers loan products that have higher and lower DTI limits. Generally speaking, the higher your down payment, the more flexible lenders can be with your DTI. For loanDepot, the upper DTI limit under special circumstances is 50%.
Finally, if you're planning to buy a fixer-upper on a renovation loan, you'll need to satisfy a few additional requirements. Your renovations cannot exceed 75% of the projected value of the home after the renovations are complete, and your plans must be approved in advance. Your down payment will be based on the projected finished value, and you'll need to work with a lender-approved contractor if the renovations account for more than 10% of the completed appraised value (otherwise you can do the work yourself).
How are loanDepot's refinance rates?
Due to loanDepot's size, you can expect refinance rates to be competitive. The day we checked, loanDepot's refinance rates were very close to the national average. Unfortunately, it is very difficult to find out what the rates are. You won't know without applying, or at least giving up a lot of personal information over the phone.
How are loanDepot's rates compared to the national average?
loanDepot's mortgage rates trend about the same as the national average. But again, you won't know what they are without initiating a conversation with this lender.
loanDepot is right for you if:
You're a veteran. VA loans are one of loanDepot's top specialties. Consider applying, if only to compare offers.
You're in a hurry to close. Home buyers on a strict timeline may also be great candidates for loanDepot. Its high-tech digital application, which automates many parts of the process, shaves days, even weeks, off the time it takes for the loan to close. According to loanDepot, some borrowers close in as few as eight days.
Ready for mortgage pre-approval?
Getting pre-approved for a mortgage loan is an important step in the home buying process. Our experts recommend mortgage pre-approval before you begin looking at houses or deciding on a real estate agent.
FAQs
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loanDepot's best mortgage interest rates trend right around the national average. Unfortunately, you won't find out what rate you might get until you apply or share a ton of personal information. loanDepot is very stingy with rate details.
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Yes, especially for a VA loan. For any mortgage, the loanDepot digital application platform is very highly rated. Their "no steering" policy means you will be directed to the best loan for you, not necessarily the most profitable loan for them.
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Yes. loanDepot's size, expertise, and technology make it a good choice for a smooth and advantageous refinance loan.
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The credit score requirement varies with the loan type. For an FHA loan, you'll need a 580 credit score. For a conventional loan, you'll need a 620 credit score. And for the best mortgage rate, you may need a 720 credit score. Similarly, the down payment requirement varies. Expect to need at least 3.5% of the purchase price.
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loanDepot offers many loan types to meet the needs of most borrowers:
- Fixed-rate mortgage
- Adjustable-rate mortgage
- Conventional loan
- FHA loan
- 203k loan (FHA renovation loan)
- VA loan
- VA IRRRL
- Refinance mortgage
- Cash-out refinance
- Jumbo loan
About the Author
Kimberly is a personal finance writer/editor, consumer credit expert, and financial literacy advocate. She has lots of degrees and personal experience that make her really good at helping people separate the good from the bad in financial products and habits. She likes to roller skate. Tweet her @rotterwrites.
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