In 2010, Anthony Hsieh started loanDepot to give consumers access to a streamlined mortgage experience. Following the 2008 financial crisis, Hsieh decided to focus on innovation as a driver of change. The traditional mortgage process was somewhat convoluted, making it difficult for first-time buyers to navigate.
loanDepot uses proprietary technology for every transaction, making the application and approval process as seamless as possible. This loanDepot review describes the financial products available and explains how the process works.
Features: loanDepot Loan Products
In addition to home loans, loanDepot offers home equity loans and personal loans to help you reach your financial goals.
Home Loans
loanDepot started out as a mortgage platform, so its lending officers have extensive experience connecting consumers with the right loan programs for their needs. Whether you’re a first-time homebuyer or a seasoned pro, you can use the loanDepot platform to review mortgage options, fill out the application and submit financial documents.
Although loanDepot is a digital mortgage platform, you still have to attend the loan closing in person. That said, closing typically takes 1 or 2 hours, so it’s not a huge time commitment. Since you can do everything else digitally, working with loanDepot still saves you time.
loanDepot also does refinancing, which is when you take out a new mortgage and use the funds to pay off your existing mortgage. Depending on market conditions, refinancing may help you qualify for a lower interest rate or reduce your monthly mortgage payments.
Home Equity Loans
loanDepot offers home equity lines of credit (HELOCs), allowing you to tap into the equity in your residential property. In the mortgage industry, equity refers to the difference between what your home is worth and how much you owe on the mortgage. For example, someone with a loan balance of $200,000 and a home valued at $300,000 has $100,000 in equity.
A HELOC is a type of secured debt, which means it’s backed by a valuable asset. If you don’t repay the money, the lender can sell the asset and use the proceeds to cover your balance.
Since HELOCs are secured, they usually have lower interest rates than personal loans. Therefore, you may benefit from using a HELOC to pay for renovations, install a new HVAC system, cover educational expenses or make other large purchases. At loanDepot, it takes as little as 3 weeks to close on a HELOC.
Personal Loans
Home equity loans aren’t right for everyone. For example, you may not want to put your home at risk by using it as collateral for a home equity loan. To ensure customers have access to multiple funding sources, loanDepot also offers personal loans.
A personal loan allows you to borrow money and pay it back in a series of fixed installments. If you have to pay an unexpected expense, taking out a personal loan may be easier than trying to come up with enough cash to cover the expense in full.
For example, if your car suddenly needs $2,000 worth of repairs, it may be challenging to come up with $2,000 in cash. If you take out a personal loan, you can pay it back over several months, making it easier to get your car back on the road without emptying your bank account.
How the loanDepot Digital Mortgage Process Works
The loanDepot mortgage process has six basic steps. Here’s how it works.
- Discuss your needs with a licensed loan officer. loanDepot has more than 1,700 officers in its network.
- Make a list of your must-have’s as well as your nice-to-have home features. This makes it easier to find a home meeting your needs. For example, if you have four children, you may want a home with five bedrooms and three bathrooms.
- Choose a loan. loanDepot offers fixed-rate and adjustable-rate mortgages, giving you extra flexibility. You may even qualify for a jumbo loan, which is a loan above the standard (conforming) loan limits, a VA loan or an FHA loan.
- Start the application process. You’ll need to submit documents verifying your income, employment history and other personal details. If you don’t have these documents available, gather as much as you can before you fill out an application.
- Get approved for a mortgage. Your loan officer guides you through the entire process and then submits your application to an underwriter for approval.
- Attend the closing appointment.
Pricing Considerations
Lenders make money by charging origination fees on their mortgages. An origination fee is usually a percentage of the loan amount, so the total cost of getting a mortgage depends on the price of the home you buy. For example, a 4% origination fee on a $400,000 home would be $16,000.
loanDepot charges a fee for many of the services it provides. For example, you may have to pay for the company to obtain your credit reports, hire a property inspector or order a property appraisal. Fees vary based on where you live, so it costs some consumers more than others to complete the digital mortgage process.
If you’re interested in a HELOC, note that loanDepot charges an origination fee of up to 5% of the amount of the credit line.
loanDepot Review: The Verdict
loanDepot offers several financial products to help consumers manage their finances. The company also has a digital mortgage process, making submitting your documents easier and scheduling a closing. If you’re comfortable submitting your mortgage documents online, loanDepot offers an excellent alternative to traditional loan companies.
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