For some consumers, meeting with a mortgage lender face-to-face provides peace of mind. But the popularity of online mortgage companies shows that plenty of folks are perfectly comfortable applying for a loan long distance.
The largest of the Internet-based firms is Quicken Loans. These days, the Detroit-based lender isn't exactly operating in a niche market. The company, which closed roughly $80 billion of home loans in 2013, claims it's the second-largest retail mortgage lender in the country.
If you're shopping for a new mortgage or trying to refinance via the web, it's important to realize that not all loan originators have the same approach. Whereas sites like LendingTree and Zillow essentially act as brokers, sending your basic information to multiple mortgage providers, Quicken Loans is a direct lender.
That has its pros and cons. Using Quicken Loans means you won't receive an onslaught of e-mails from lenders trying to get your business. And your personal information gets into fewer hands, a big draw for privacy-minded customers.
On the other hand, it's hard to know whether you're getting the best rate if you don't have several bids coming your way. Moreover, if you approach more than one direct lender to comparison shop, you could end up with more paperwork – and more queries to your credit report (see How does refinancing my mortgage affect my FICO score?).
One advantage of Quicken Loans is choice. The company, which dates back to 1985, offers conventional mortgages – it provides both fixed and adjustable-rate varieties – as well as specialized products such as VA and FHA mortgages. For more information, see Fixed Or Variable-Rate Mortgage: Which Is Better Right Now?, 7 Things to Know About FHA Home Loans and The Unique Advantages of VA Mortgages.
Streamlined Loan Process
In some respects, the process of obtaining a mortgage through Quicken Loans is fairly similar to that of traditional lenders. The main difference is that potential homebuyers can perform most of the steps online.
The five-step process for getting a Quicken Loan mortgage includes:
1. Application. To get the application underway, borrowers can chat, email or call a Quicken Loans mortgage banker. According to the company, a home loan expert will ask several questions about your goals, then recommend solutions that meet your needs.
2. Credit Review. Like other mortgage lenders, Quicken uses your credit score to determine your eligibility for specific loans and your interest rate. Customers can access their credit report online or have one of its mortgage specialists pull it. For more, see What Is A Good Credit Score?
3. Good Faith Deposit. The good faith deposit is a feature that works a little differently than with some lenders. Customers pay a fee up front – between $400 and $750 – to cover the cost obtaining your credit report, the home appraisal fee and loan processing costs. The good news is that the company deducts the deposit from your other closing costs, so in the end you may not be paying more than you would with other lenders.
4. Underwriting. This is the nitty-gritty part of the mortgage process. To ensure you're eligible for the loan terms you've been offered, the lender has to verify your income, assets and other financial information. The company will also order an appraisal of the property to ensure it's not lending more than the home is worth. See What You Should Know About Home Appraisals.
5. Closing. One perk of using Quicken Loans is that you can pretty much pick where you want to close the loan. It could be at your home, office or even a nearby coffee shop. This is the only stage where you will meet with a Quicken representative in person.
Once the mortgage is settled, customers make monthly payments – either directly to Quicken Loans or to a separate loan servicer, depending on the loan.
A Strong Track Record
Quicken markets itself as a more convenient alternative to traditional lenders. A big part of that appeal is the ability to manage one's loan application via MyQL, an online tool created by Quicken that can be accessed either online or via a mobile app, MyQL Mobile.
MyQL allows borrowers to access a personalized website where they can receive messages from Quicken, make payments and even sign documents. The MyQL mobile app, available for iPhone or Android, operates in the same way. All borrowers need a personalized username and password to gain access to the information.
With the ability to track progress online and sign documents electronically, the company claims that borrowers benefit from a faster mortgage process. According to Quicken Loans, some loans close in as short a time as two to four weeks.
Do home owners have to sacrifice service when working with a banker in another part of the country? According to most industry s, the answer is a no. J.D. Power, which ranks mortgage originators based on customer satisfaction, awarded Quicken Loans its top spot for the fifth consecutive year in 2014. The company also receives 4.5 stars out of 5 on real estate site Zillow.
The Bottom Line
Over the years, Quicken Loans has built a reputation as a convenient way to get financing for one's home. Still, it doesn't hurt to do some shopping around to ensure a competitive interest rate. And read our tutorial Mortgage Basics to update yourself on the overall process.
