Consider applying through loanDepot if you want an online-first application process from a direct lender with many mortgage types. You can apply for a home purchase loan, a mortgage refinance or a home equity line of credit (HELOC).
LoanDepot has a no-steering policy that prevents their agents from promoting loans that are not in the buyer’s best interest. Additionally, potential borrowers won’t see “teaser rates” that are challenging to qualify for and can make the mortgage comparison process confusing.
Borrowers can apply online and there are over 200 local branches across the nation for additional flexibility. You may also consider this company if you plan on refinancing in the future as the loanDepot Lifetime Guarantee will waive lender fees on your follow-up loan.
LoanDepot overview
LoanDepot was founded in 2010 and operates in all 50 states. It is a direct mortgage lender that issues new home loans, refinances and HELOCs for conventional and government-backed mortgage programs.
According to the lender, they are the nation’s fifth-largest retail mortgage lender and second-largest non-bank retail originator, and they have funded more than $275 billion in loans. In other words, this service has a lot of experience helping homeowners get the loan they need.
LoanDepot mortgage options
The available home purchase and refinancing options include:
- Adjustable-rate conventional
- Fixed-rate conventional
- Construction loans
- FHA loans (including 203k home renovation loans)
- VA loans
- Jumbo loans
- Cash-out refinance
- Home equity line of credit
Most fixed-rate loans offer a repayment term from 10 years to 30 years and comply with the Fannie Mae and Freddie Mac conforming loan limits which is $726,200 in most counties. Jumbo loans are available in balances up to $3 million.
Adjustable-rate mortgages will have an initial fixed rate from three years to 10 years. However, there are multiple loan portions available.
Borrowers have the option of applying online or by working with a local loan officer at a branch nearby. With either application method, you can work with an assigned agent to help you navigate the underwriting process.
How to qualify for a loanDepot mortgage
LoanDepot doesn’t disclose its minimum borrower requirements although several standards may vary by loan program. While you will need to work directly with an agent to review your loan options, you can strive to achieve these basic guidelines:
- Credit score: 620 or higher for conventional mortgages and at least 580 for FHA loans.
- Debt-to-income (DTI) ratio: A DTI of 43% or lower is advisable, although some programs permit a maximum 50% DTI for qualified borrowers.
- Down payment: As low as 3.5% for FHA loans, 5% for conventional mortgages and 0% for VA loans. When you’re applying for a conventional loan, a minimum 20% down payment (80% loan-to-value (LTV) ratio) is necessary to avoid paying private mortgage insurance.
An agent will review the required documents for initial prequalification and eventual mortgage preapproval. You should have your most recent tax return and pay stubs accessible to validate your income history.
How to apply for a loanDepot mortgage
You can apply online, by phone or by scheduling an appointment with a local branch office.
If you decide to apply online, the loanDepot application steps include the following:
- Submit your information. The first step is to provide your name, zip code and phone number to speak with a loan officer.
- Speak with a loan officer. A licensed mortgage agent will call you to review your loan options and discuss the next steps if you’re interested in applying for a mortgage.
- Upload your paperwork. You can upload the required documents using the digital dashboard. Phone, email and screen-sharing support are available to solve technical difficulties.
- Get a home appraisal. Most home loan types require an appraisal to estimate the market value and loan-to-value ratio requirements.
- Sign the final documents. Most applications take from 30 to 60 days for purchase loans and refinances. Additionally, it’s possible to close HELOC applications in as little as two weeks.
Follow our step-by-step guide: How to get a mortgage in 8 steps
Pros of a loanDepot mortgage
- Can apply online, by phone or in-person.
- No-steering policy.
- Offers new purchase, refinance and HELOC loan options.
- The Lifetime Guarantee allows repeat borrowers to avoid lender fees when refinancing.
Cons of a loanDepot mortgage
- Doesn’t publish rates or fees.
- Doesn’t disclose minimum borrower requirements.
- Must speak with a licensed lending offer before prequalifying.
- Doesn’t offer home equity loans (only HELOCs).
LoanDepot perks and special features
Here are some of the best benefits of using loanDepot and how to minimize your lender fees.
Savings and discounts
After originating your first purchase loan or mortgage refinance through loanDepot, you won’t pay lender fees or appraisal costs any time you refinance on the same property. This benefit is the loanDepot Lifetime Guarantee which applies to eligible loans that are at least 12 months old.
You can also receive cash back when you get pre-approved for a home through loanDepot and buy a house through the lender-affiliated mellohome platform. There are additional discounts available for first-time homebuyers.
No-steering policy
All agents are licensed and adhere to a no-steering policy. As a result, mortgage officers don’t receive special incentives when applicants choose a particular loan type.
Instead, the lender will help compare your loan options to pick the best product for your borrowing needs whether it’s a conventional or federally-insured loan.
Multiple home loan options
Borrowers can access most home purchase and mortgage refinance options, including conventional, FHA, VHA and jumbo loans.
As mortgage rates are near multi-year highs, borrowers wanting to tap their home equity may consider applying for a HELOC instead of choosing to refinance.
Apply online or locally
It’s possible to complete the entire application process electronically if you don’t have the time or desire to visit a local office. However, there are more than 200 physical branches across the U.S. and 1,700 licensed agents.
How loanDepot could improve
Here are some areas of weakness that can frustrate borrowers.
Rates and fees are not published
Unlike many of the best mortgage lenders which disclose a range of current interest rates, you must submit your contact details and speak with a licensed agent to receive an initial rate quote and estimate your lender fees.
This requirement to speak with an agent before you can prequalify is frustrating and time-consuming for rate shoppers. Being able to prequalify for a purchase loan or refinance and seeing an estimated loan APR and total closing costs would make it easier to compare lenders.
Borrower requirements are not transparent
While it’s not uncommon for mortgage lenders to not publicize every borrower requirement as several variables impact the application decision, the lender is less transparent on the initial standards than most platforms.
No home equity loan option
A cash-out refinance and HELOC will allow most homeowners to easily borrow from their equity with flexible draw and repayment terms. However, loanDepot currently doesn’t offer home equity loans with a fixed interest rate which can be a better option for certain situations.
Further, loanDepot does not yet offer HELOCs in every state like cash-out refinancing.
Limited customer service
Phone-based customer support is only available on weekdays. Borrowers who need additional flexibility and support over the weekend might consider big bank lenders that are more likely to offer daily service and even 24/7 support.
LoanDepot customer service and reviews
Phone support is available Monday through Friday from 10 a.m. to 9 p.m. ET. Customers can send an email for less-urgent matters or to initiate an inquiry outside of operating hours. Additionally, you can contact a local branch location to get a rate quote.
As of April 2023, loanDepot’s customer review scores include:
- BBB: 4.08 out of 5 with 3,775 reviews
- ConsumerAffairs: 4 out of 5 with 377 ratings
- Trustpilot: 3.8 out of 5 with 3,949 ratings
Across these platforms, most customers are pleased with the responsiveness and knowledge of their loan officer and multiple positive reviews highlight the hands-on help and fast closing times.
However, a common complaint is the challenge that accompanies long-distance communication to provide additional documentation or clarify underwriting delays. Some other complaints mention a potentially high home appraisal fee and confusion or unexpected delays during the underwriting process.
Additionally in April 2023, the loanDepot mobile app has a score of 4.8 out of 5 with 819 ratings on the Apple App Store and scores 4.8=6 out of 5 with 318 reviews on Google Play. This app lets you manage your account and schedule loan payments.
LoanDepot alternatives: LoanDepot vs. Rocket Mortgage vs. Better
Two other non-bank lenders you may consider are Rocket Mortgage and Better. Both offer many overlapping conventional, FHA and VA purchase and refinance options. However, the competitors tend to be more transparent about their rates, fees and minimum qualifications.
If you prefer local branch access, then loanDepot can still be the better choice.
Rocket Mortgage lets you compare today’s mortgage rates for the lender’s most popular home loan options. However, you must prequalify to receive personalized rates. Mortgage agents are available daily and you can reduce your closing costs by completing micro-tasks through the Rocket Rewards loyalty program.
You can preview the best purchase and refinance rates through Better. The online lender also offers HELOCs and home improvement loans. Additionally, you won’t pay lender fees, so saving money is possible if you qualify for a similar interest rate as loanDepot offers.
Frequently asked questions (FAQs)
Yes, loanDepot is a legit mortgage lender for home purchase loans, mortgage refinances and HELOCs. You will work with a licensed mortgage officer by phone or at a local location. This lender has many positive customer reviews and a “no steering policy” to avoid taking advantage of potential borrowers.
LoanDepot requires a minimum credit score of 620 for conventional mortgages and 580 for FHA loans with a 3.5% down payment or 500 with a 10% down payment.
Most home purchase loans take 30 to 45 days to close while refinance applications can require from 45 to 60 days. A digital HELOC application can take as little as 14 days to complete.
Yes, lender fees and home appraisal costs apply on most loan types but the lender doesn’t disclose any estimated fees until you speak with a licensed agent. Although you pay fees on the original mortgage, the loanDepot Lifetime Guarantee waives future lender fees each time you refinance that particular loan.
Purchase and refinance loans that you apply for directly through loanDepot are eligible for the lender’s Lifetime Guarantee. On loans originating on or after January 1, 2019, borrowers can apply for a refinance and not pay lender fees after an initial 12-month waiting period.
