Rocket Mortgage Home Equity Loan Review 2024
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Our Take
3.5
Rocket Mortgage’s home equity loan stands out for having no application fees and a borrowing limit above the industry standard, but home equity loan rates are not posted online and applicants are required to get an appraisal.
Pros
- No application fee.
- Borrowers can apply within the lender’s mobile app.
- Home equity loans are available for second homes and investment properties.
Cons
- Home equity loan rates are not posted online.
- Home appraisal is required.
Lender | Max. loan amount | Max LTV | Min. credit score | |
|---|---|---|---|---|
$400,000 | 85% | 640 | Visit Lenderat Figure at Figure | |
$750,000 | 80% | 580 | Visit Lenderat New American Funding at New American Funding | |
$1,000,000 | 85% | 670 | Visit Lenderat Bethpage Federal Credit Union at Bethpage Federal Credit Union |
Full Review
Rocket Mortgage home equity loan rates and transparency
Most home equity loan interest rates are affected by the movement of a base rate called the prime rate. Your rate will include a margin the lender has added to the prime rate. These margins depend largely on factors like your credit score, your existing debt, your income and the amount you wish to borrow. They will vary by lender.
Current prime rate | Prime rate last week | Prime rate in the past year — low | Prime rate in the past year — high |
|---|---|---|---|
7.75% | 8% | 7.75% | 8.50% |
Rocket Mortgage does not post home equity loan interest rates online.
Applying for a Rocket Mortgage home equity loan
Borrowers can begin an application online or via the Rocket Mortgage mobile app. However, you’ll have to connect with a loan officer over the phone or through online chat in order to complete the process.
Applicants must have a minimum credit score of 680 to qualify for a Rocket Mortgage home equity loan. The lender also requires a full appraisal.
Borrowers can contact customer support via phone or through an AI chat bot on the lender’s website. In-person support is available in Detroit, Cleveland and Phoenix. When we called, we were connected with an agent in under two minutes.
What you should know about Rocket Mortgage home equity loans
The maximum amount you can borrow with a home equity loan (called your combined-loan-to-value ratio, or CLTV) is equal to a percentage of the value of your home, minus what you owe on your primary mortgage (if anything). Rocket Mortgage tells us that its max CLTV for home equity loans is 80%, but according to the lender's website, a borrower's credit score will influence the maximum. Homeowners with a lower credit score may be eligible to borrow up to 75% CLTV, while those with a higher credit score may be eligible to borrow more than 80% of home value minus outstanding mortgage. Your total debts cannot exceed 45% of your income.
Rocket Mortgage home equity loans have repayment term options of 10 or 20 years. There is no application fee, but borrowers must pay closing costs and obtain a full home appraisal. The average Rocket Mortgage home equity loan takes 20 days from the date of application to close.
» MORE: Best home equity loan lenders
Alternatives to a Rocket Mortgage home equity loan
Borrowers who want to avoid paying closing costs may be interested in Discover Home Loans.
For borrowers who prioritize flexibility in repayment terms, Pennymac allows for terms as long as 30 years.
Home equity loans let homeowners access a lump sum by converting equity into debt. You’ll repay the loan at a fixed interest rate over an agreed period of time. Alternatives to a home equity loan include a home equity line of credit (HELOC) or a cash-out refinance. HELOCs offer greater flexibility to withdraw funds, up to the credit limit, as needed, but often have adjustable interest rates. A cash-out refinance replaces your existing mortgage with a larger loan. It will be most appealing if mortgage rates are lower than your current rate, and closing costs will apply.
Rocket Mortgage offers cash-out refinancing.
NerdWallet’s home equity loan star ratings are awarded by the editorial team based on the following evaluated factors: maximum combined loan-to-value ratio, available terms, closing costs, application fees, appraisal requirements, interest rate transparency, digital application availability, customer support experience and whether the lender has been subject to government penalties exceeding $1 million.
