If you’re planning on buying a home and are shopping for a mortgage, it’s easy to get overwhelmed by the many lenders out there.
loanDepot is a popular option for many borrowers, funding over $275 billion in consumer loans since its inception. It promises a streamlined, technologically advanced loan experience, but is a loanDepot mortgage right for you? In this loanDepot mortgage review, you’ll learn what it has to offer so you can decide if it’s the best choice for your home purchase or refinance.
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An overview of loanDepot
loanDepot was founded in 2010 by Anthony Hsieh and has grown to be the fifth-largest retail mortgage lender (direct lender) in the U.S. Using its proprietary “mello smartloan” software, loanDepot provides a digital loan process along with in-person or online support.
loanDepot offers multiple mortgage options and caters to a wide range of customers. Some of its mortgages are considered a higher risk, meaning loanDepot occasionally lends to homebuyers who are less creditworthy. The company’s annual report shows that the majority of its customers have credit scores over 680.
loanDepot boasts a lifetime guarantee on its mortgage loans. 1 If you finance a home with loanDepot once, you could refinance your loan (assuming you meet the loan terms and requirements), and loanDepot will waive its lender fees and reimburse you for the appraisal fee.
Which loan products does loanDepot offer?
loanDepot offers a wide range of loan types to appeal to a wide variety of borrowers. Its loan options include:
- Conventional loans: loanDepot offers conventional fixed- and adjustable-rate mortgages.
- Jumbo loans: With a jumbo loan from loanDepot, you could borrow up to $3 million.
- FHA and VA loans: loanDepot also offers Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) home loans with low or no down payment requirements.
- 203(k) loans: This option is a renovation loan offered by the FHA that covers the cost of the home along with reasonable rehabilitation costs.
- Refinancing: Refinancing allows you to take advantage of a better interest rate or terms or take out equity with a cash-out refinance.
loanDepot doesn’t offer USDA loans or home equity loans.
Conventional mortgages at loanDepot
A conventional mortgage is offered by private lenders like loanDepot, and they aren’t backed by government entities. loanDepot’s conventional loans have a 5% minimum down payment requirement.
Conventional mortgages are typically best for borrowers who have good to excellent credit. If you put less than 20% down, private mortgage insurance is typically required, but you can ask for the insurance to be canceled once your loan balance reaches 80% of the original value of your home.
Conventional mortgages can have fixed or adjustable rates.
|Loan term||10, 15, 20, or 30 years|
FHA mortgages at loanDepot
You could qualify for an FHA loan with a credit score as low as 500 if you have a down payment of 10%. If your credit score is 580 or higher, you could have as little as 3.5% as a down payment. To get approved, your debt-to-income ratio must be under 43%.
FHA mortgages have terms of either 15 or 30 years, and all FHA loans have fixed interest rates.
Depending on the size of your down payment, you may have to pay private mortgage insurance for the duration of the loan.
|Loan amount||Maximum of $420,680 with a higher limit of $970,800 in high-cost areas for 2022|
|Loan term||15 or 30 years|
|Credit needed||500-579 with a 10% down payment
580 or higher with a 3% down payment
VA mortgages at loanDepot
If you are currently a U.S. service member or are a military veteran, you may be able to take advantage of a VA mortgage. VA loans stand out from other mortgages because they don’t require a down payment. Many VA mortgages aren’t subject to loan maximums, and they don’t require private mortgage insurance. They can be fixed- or adjustable-rate mortgages.
VA loans also don’t have a minimum credit score requirement. Instead, the VA requires lenders like loanDepot to look at the borrowers’ entire loan profile to determine their eligibility for a loan.
|Loan term||Up to 30 years|
|Credit needed||No minimums core|
203(k) mortgages at loanDepot
Want to finance a fixer-upper? A 203(k) loan can be used to refinance an existing home and complete renovations on that home or to buy and remodel a fixer-upper. The FHA backs these loans, and the money for the renovations will be held in an escrow account. As different renovation milestones are met, the lender will release the funds to your contractors.
You could qualify for a 203(k) mortgage with just 3.5% down, but you need a credit score of at least 620. Your mortgage can have either fixed or adjustable rates.
|Loan term||15 or 30 years|
loanDepot refinance loans
If you have a mortgage with a fairly high interest rate, you could potentially refinance your mortgage to get a lower rate. You could also refinance your loan and switch from an adjustable-rate mortgage to a fixed-rate loan or change the length of your repayment term.
loanDepot also offers cash-out refinances. These loans allow you to borrow more than the amount you owe on your home and receive the difference in cash. You can use the funds for any purpose.
If you are thinking about refinancing, keep in mind that you’ll have to pay closing costs like origination fees. Eligibility criteria for a loanDepot refinance loan is dependent on a range of factors, including your existing home’s value, your loan-to-value ratio, and the type of mortgage you currently have. Your loan-to-value (LTV) ratio compares your home loan to the value of your property.
What loanDepot customers are saying
In general, loanDepot is a reputable company. It has an A+ rating from the Better Business Bureau, and its customer reviews on third-party sites are about average.
Customers typically praise the ease of the application process and speed, but some customers complained about errors with their paperwork and difficulties getting in touch with a loan officer.
|Site||Rating||Number of Reviews|
|Credit Karma||3.7 out of 5||Over 1,300 reviews|
|Consumer Affairs||3.4 out of 5 stars||Over 400 reviews|
|Trustpilot||3.7 out of 5 stars||Over 3,600 reviews|
Before applying for a loan from loanDepot or any lender, make sure you can comfortably afford the monthly payments and have some money saved as a cushion.
FAQs about loanDepot
Is loanDepot a reputable company?
loanDepot is an established and reputable company that has been in operation since 2011. Its loans are available in all 50 states. While it offers a digital mortgage experience, it also has representatives available to assist customers through every step of the process. According to the company, approximately 10,000 workers assist over 27,000 customers every month.
What is the APR for a loanDepot mortgage?
loanDepot does not share its APR ranges. However, you can get a general idea of what purchase and refinance rates to expect with its rate calculator. Depending on the type of loan you choose, you may have a fixed or adjustable rate, and terms range from 10 to 30 years.
Is loanDepot a direct lender?
Although some companies will take your information and share it with third-party lenders, loanDepot doesn’t work that way. Instead, loanDepot is a direct lender, so it is the company that will issue your mortgage.
The final word on loanDepot
With loanDepot, you can apply entirely online, but the company does have mortgage specialists who can provide personalized assistance if you need help. If you’re wondering how to get a loan, loanDepot has several options that work for borrowers with fair credit and low down payments.
However, loanDepot mortgage rates aren’t available online, and some customers have complained about slow service in loanDepot reviews. Before submitting your information with loanDepot, it’s a good idea to shop around and compare rates from the best mortgage lenders to find the right loan for you.