LOANDEPOT MORTGAGE REVIEW 2024: EVERYTHING ONLINE — EXCEPT CURRENT RATES

Vault’s Viewpoint on loanDepot Mortgages

If you want a streamlined mortgage application process that leans on the latest technology, loanDepot can deliver. Through its in-house mello® software platform, the direct lender can speed underwriting by automatically collecting information about the applicant’s income, assets and employment history. 

For people who prefer an in-person interaction, loanDepot also has branch locations across the country, including in Alaska and Hawaii. 

On top of all of that, the company offers several types of mortgages, including ones backed by the Department of Veterans Affairs (VA) and the Federal Housing Administration (FHA). In other words, with loanDepot, you have options. 

All of this said loanDepot mortgage reviews are conflicting, with some sources giving the lender a stellar rating and others reporting customer satisfaction to be below average. Part of the mixed reception could stem from the fact that loanDepot mortgage rates aren’t readily available online, a data point that’s hugely important for home loan comparison. 

If you want an easy mortgage application process, loanDepot is worth your consideration. But we recommend getting your personalized rate from a loanDepot loan officer and then comparing it against rates from other companies before diving in. 

About loanDepot

Founded in 2010 and headquartered in Irvine, California, loanDepot uses its mello® software platform to underwrite mortgages. To date, the company’s team of more than 6,000 people has funded over $275 billion in mortgages.

The mello software automatically pulls in key information like your employment history and income, making it a lower lift to apply for a loan with loanDepot. If you like to do things digitally, you can navigate the entire application process online. If you don’t, the company has a well-distributed network of branch locations you can visit. 

That’s just a quick overview. If you’re seriously considering loanDepot, here are some things you should know, including pros and cons. 

The Pros of loanDepot Mortgages

Loan Availability

loanDepot offers a variety of loan programs, including:

• VA loans
• FHA loans
• Adjustable-rate mortgages (ARMs), including:
  • 3-year (3/1) ARMs
  • 5-year (5/1) ARMs
  • 7-year (7/1) ARMs 
  • 10-year (10/1) ARMs
• Fixed-rate conventional (not government-backed) loans with terms of:
  • 10 years
  • 15 years
  • 20 years
  • 30 years

Loan Officer Availability and Guidelines

loanDepot has a wide network of branch locations you can visit, or you can call the lender at (888) 983-3240.

When you connect with a loan officer, you’ll be glad to know that loanDepot employs a “No Steering” policy. That means two things for you as a prospective borrower. 

First, loan officers aren’t incentivized to sell any specific loan. That frees them up to help you find the best loan for your unique situation, not the one that will pad their paycheck the most. 

Secondly, that “No Steering” policy also prohibits loanDepot team members from offering teaser rates for which borrowers won’t actually qualify. So when you get a rate quote from the loan officer, it should represent the rate you’ll actually get if you apply.

First-Time Homebuyer Benefits

While loanDepot mortgage reviews are somewhat mixed, there’s no denying that this lender offers major perks for first-time buyers. If you partner with loanDepot’s mellohome real estate agents to find your house and use loanDepot for your mortgage, you can get up to $4,500 cashback. Plus, your loan doesn’t close on time and loanDepot’s Close on Time Guarantee applies, both you and the seller can get $1,000. 

Lifetime Guarantee

If you refinance your qualifying loanDepot home loan with loanDepot, the lender can waive all lender fees on your refi. Note that you need to get a “loanDepot Lifetime Guarantee” certificate with your initial mortgage to be eligible for this fee-free refinance. 

The Cons of loanDepot Mortgages

Rate Transparency

One of the biggest drawbacks of loanDepot is its lack of rate transparency. Most other lenders — from national players to local lending institutions — feature current rates on their websites. But loanDepot mortgage rates are nowhere to be found on the company’s site. To get an idea of the rates the lender offers, prospective borrowers need to either fill out a lead form online or call a loan officer. Either way, you’re handing over your personal contact information in exchange for loanDepot mortgage rates. 

To make matters even less ideal for prospective borrowers, loanDepot currently has a rate of 4.5% loaded into its mortgage calculator — well below the current average of 7.18% for a 30-year fixed-rate mortgage. 

Customer Service Availability

loanDepot’s customer service line is reportedly open at (888) 337-6888 from 10:00 a.m. to 9:00 p.m. ET on weekdays. That said, when we called in and tried to use the provided phone tree, our call got disconnected repeatedly. When we used the dial-by-extension feature with extension 6789, which is listed in the footer of the company’s website, the call finally went through to a live person. 

Recent Cybersecurity Incident

Prospective borrowers should know that loanDepot is currently in the middle of recovering from a recent data breach. It was serious enough that the company is now backing credit monitoring and identity theft protection services for some of its customers.

Mixed Results: loanDepot Mortgage Reviews

loanDepot mortgage reviews are a bit of a mixed bag. While the company has 4.91 stars out of 5 from more than 6,500 reviews on Zillow, it has a notably lower 3.9 out of 5 stars on Trustpilot.

loanDepot has an A+ rating from the Better Business Bureau (BBB). That doesn’t mean the lender is customer complaint-free, though. Rather, that rating measures how responsive it is when complaints do arise. The BBB has tracked 751 complaints against the lender in the last three years. In the last 12 months, it reports that 152 of those complaints have been closed, usually due to some resolving action from loanDepot. 

The company scored near the bottom in the most recent J.D. Power U.S. Mortgage Origination Satisfaction Study. 

Clearly, loanDepot mortgage reviews aren’t resoundingly positive. Almost every large-scale mortgage lender deals with complaints, though, so that shouldn’t necessarily put you off this lender. 

Minimum Borrower Requirements for loanDepot

While loanDepot mortgage rates remain something of a mystery on their website, the company does outline some requirements for prospective borrowers. Those include: 

• Debt-to-income (DTI) ratio: loanDepot generally works with borrowers who have a DTI ratio of 35% or lower. That means that when you divide all of your monthly debt payments by your gross monthly income, the resulting number falls below that 35% mark. Total monthly debt means your monthly mortgage payment plus anything else you have due, like student loan repayment or credit card bills. 
• Credit score: loanDepot does offer FHA loans, and some FHA loans come with a minimum credit score requirement of 500 (with a 10% down payment). That said, the loan officer we spoke with said the company rarely allows below 550. 
• Loan-to-value (LTV) ratio: To get the best interest rate, borrowers generally need to have an LTV ratio of 80% or less, meaning that they’re borrowing 80% or less of the home’s appraised value. That means putting 20% down. That said, loanDepot will allow for a much higher LTV with certain loan programs. If you get a mortgage backed by the FHA, for example, you may be able to put just 3.5% down, meaning you have a starting LTV of 96.5%. 

loanDepot doesn’t specifically lay out income and asset requirements, but most mortgage lenders require you to have a steady income stream that you can prove (usually with tax returns) and some cash in savings to cover your down payment and closing costs. 

How to Apply for a loanDepot Mortgage

One thing many loanDepot mortgage reviews applaud is the ease of its mortgage application process. The steps are as follows:

1. Get connected to a loan officer. You can do this by filling out the loanDepot application form. That requires some basic info, like:
   1. Your zip code
   2. The price of the house you want to buy
   3. Your down payment amount
   4. Your credit score range
   5. Your name and your contact info

With this information, a licensed loan officer can reach out to you with a personalized rate quote. 

1. Choose the loan type you want. That loan officer can walk you through mortgages for which you qualify. They can help you explore government-backed options like FHA and VA loans, for example, and compare adjustable-rate mortgages against fixed-rate loans.
2. Apply for preapproval. Your loan officer works with you to get all of the needed documentation submitted to preapprove you for a mortgage. That usually includes tax returns and bank statements. loanDepot’s software may be able to get this information for you automatically, making this part of the application process faster and easier. 
3. Compare your preapproval against other offers. Financial experts recommend comparing multiple preapproval offers to ensure you’re getting the best rate. So go through this same preapproval application process with at least a couple of other lenders. Specifically, compare the annual percentage rate (APR) of your preapprovals. That represents the yearly cost of the loan, including not just interest but any other fees the lender charges. 
4. Close your loan. Once you pick the lender you want to work with, it’s time to finish the application process. When you get the final approval from loanDepot — which can take weeks as they look closely at your finances — they schedule a loan closing appointment. At this appointment, you’ll sign some paperwork and finalize your loan. 

How does loanDepot stack up to its competitors?

If you’re looking into loanDepot mortgage reviews and rates, you might be drawn to a mortgage experience that’s primarily digital. loanDepot certainly isn’t the only player in the game here. Other lenders can offer you a tech-supported experience, too. 

loanDepot vs New American Funding

Like loanDepot, New American Funding is a lender offering online applications and is licensed in all 50 states. But while you’ll have to provide your contact information to get loanDepot mortgage rates, New American Funding publishes its current average interest rates on its website. 

loanDepot offers fee-free refinancing to eligible borrowers, which can be appealing if you’re worried rates are overly high right now. New American Funding offers a similar perk with its 5-year rate protection pledge, which lets borrowers refinance without any fees if rates drop. 

New American Funding has a lower BBB rating (A compared to loanDepot’s A+), but it has fewer complaints in the last three years (155 compared to loanDepot’s 751). It ranked better than loanDepot — but still below average — in J.D. Power’s mortgage origination satisfaction survey.  

loanDepot vs Ally

If you’re drawn to loanDepot’s tech-powered processes, Ally offers similar options, like its advertised all-online preapproval that takes just minutes. It also has a leg up in rate transparency: Its current rates are listed online, a notable difference from the undisclosed loanDepot mortgage rates. 

And if you’re looking for speed, you’ll likely be drawn to Ally’s One Day Mortgage, which lets you turn a locked rate into a Commitment Letter in 24 hours under qualifying circumstances.loanDepot mortgage reviews are fairly comparable to Ally’s. Zillow reviews for Ally average out to 4.44 stars out of 5. It has an A rating from the BBB with 528 complaints in the last three years.