Rate Mortgage Review 2024
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- Objective, comprehensive star rating system assessing 120+ categories and 5,000+ data points.
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Our Take
5.0
Rate boasts a streamlined application process, with full underwriting in as little as one business day, though average fees are higher than many competitors’. Most likely to appeal to buyers looking to act quickly in a hot market.
Pros
- Fully underwritten mortgage approval in as little as one day for qualified borrowers.
- Generous selection of loans, including government-backed, interest-only, jumbo and renovation.
- Advertises a HELOC that can be funded in as few as five business days.
Cons
- Origination fees are on the high side, according to the latest federal data.
- HELOC requires immediate, full withdrawal of funds.
Lender | Min. credit score | Min. down payment | |
|---|---|---|---|
580 | 3% | Visit Lenderat New American Funding at New American Funding | |
620 | 3% | Visit Lenderat NBKC at NBKC | |
580 | 3.5% | Visit Lenderat Rocket Mortgage, LLC at Rocket Mortgage, LLC |
Full Review
Rate — formerly known as Guaranteed Rate — is a nonbank lender based in Chicago. Loans are available in all 50 states, as well as Puerto Rico and the District of Columbia. The company updated its name in July 2024.
🏠 Popular loan types include: Fixed or adjustable rate; conventional; FHA; VA; USDA; jumbo; rate-and-term and cash-out refinance.
🔑 Specialty loan options include: Low income; renovation; interest-only; non-QM; physician; reverse mortgages.
💵 Home equity borrowing options: HELOC.
Rate emphasizes speed and digital convenience, prominently offering same-day preapproval for purchase mortgages and refinances. A separate but related product, PowerBid, can give buyers full underwriting within a day. You'd still need an appraisal, insurances, and so on, but it's virtual assurance to a seller that your loan will close.
In addition to a full slate of standard and speciality home loans, Rate's OneDown program offers grants of up to $2,500 toward closing costs to lower-income home buyers, among other benefits.
Rate offers a home equity line of credit, or HELOC, that it claims can get borrowers funds in as little as five days. But this line of credit works differently from most HELOCs: The borrower is required to withdraw the full amount as a lump sum when the loan is made and repay it at a fixed rate, like a home equity loan. It's still a line of credit though, with a draw period of two to five years (much shorter than the 10 years that lenders usually offer). Subsequent withdrawals are at prevailing interest rates, not the fixed rate from when the HELOC was initially taken out.
How we score Rate
Every year, NerdWallet writers and editors use the latest data and independent research to score lenders on an overall rubric, reflecting factors that are most important to mortgage borrowers. Select Why This Category Matters below to learn more.
Rate has a NerdWallet home loans rating of 5 stars overall. Here’s a breakdown of this year’s score.
Category | Star rating |
|---|---|
Average mortgage rates and fees | |
Mortgage rate transparency | |
Variety of loan types | |
Customer experience |
- Why This Category Matters
Average mortgage rates and fees (30%)
Our team analyzes federal data to compare mortgage lenders’ origination fees and offered mortgage rates, measuring annual averages across all loan types, as reported by the lenders. The lowest combination of average rates and fees earns the highest star rating in this category. (It’s worth noting that loans considered higher risk, including those such as FHA loans that are easier to qualify for, often have higher interest rates and fees.) Pro tip: In some cases, paying upfront fees may lower a borrower’s mortgage interest rate.
Mortgage rate transparency (25%)
We check how straightforward it is to comparison-shop rates online. NerdWallet’s transparency ratings are higher for lenders that post sample rates on their sites, and highest for sites with self-serve tools that allow shoppers to see what rates might be like for their particular loan. Pro tip: Borrowers who compare customized rate quotes by applying to three or more lenders could save thousands of dollars over the life of their loan.
Variety of loan types (25%)
Finding the right mortgage is different for each borrower. The highest star ratings in this category are awarded to lenders that our research shows offer a wide range of loan types, improving the odds that a borrower will find the best match for their needs: options for purchase and refinance; fixed-rate and adjustable-rate loans; government-backed FHA, VA or USDA loans; renovation or construction loans; and home equity loans or HELOCs.
Customer experience (20%)
How easy is it to interact with this lender? The highest-rated lenders in this category offer features that are convenient and clarifying for borrowers, such as: an online application, multiple customer service options, a helpful mobile app and candid closing timeline communications.
Rate also earned bonus points for expanding homeownership opportunities through first-time home buyer assistance, credit score flexibility and loans for manufactured homes.
What borrowers say about Rate
NerdWallet’s lender star ratings assess objective qualities, including rates, fees and loan offerings. To help you understand borrowers’ subjective experiences, NerdWallet has gathered customer satisfaction ratings from J.D. Power and Zillow. We also contacted Rate customer support.
→ Below-average score in J.D. Power’s 2023 U.S. Mortgage Origination Satisfaction Study. Mortgage origination covers the initial application through closing day.
Score: 704 out of 1,000. Industry average for origination is 730.
→ Excellent customer rating on Zillow.
Customer rating: 4.97 out of 5, as of the date of publication. Rating reflects more than 21,000 customer reviews.
🤓 Our Nerds say...
It's easy to start a mortgage application with Rate on its website or via the app. Customer service is limited to phone or email, though when we called Rate, we were connected almost instantly to a loan officer who thoroughly answered all of our questions.
» MORE: How to apply for a mortgage
Alternatives to a home loan from Rate
We recommend comparing mortgage rate offers from three or more lenders.
Rocket Mortgage is another large, convenience-focused nonbank lender.
California-based nonbank lender Guild Mortgage also offers a diverse mix of home loan options, including FHA loans.
More from NerdWallet
NerdWallet’s overall ratings for mortgage lenders are evaluated based on four major categories: average mortgage rates and origination fees, rate transparency to consumers, variety of loan types (purchase, refinance, fixed and adjustable, for example) and customer experience. Among the factors we consider in these categories are: options to apply for home loans online, typical time to close, mobile app experience, level of detail about mortgage rates on lender websites, and NerdWallet’s own analysis of the rates and fees lenders reported in the latest available Home Mortgage Disclosure Act data. These and other items inform detailed rubrics, which generate ratings from 1 star (poor) to 5 stars (excellent). Read more about how we rate mortgage lenders here.
