LoanDepot is a sizeable online lender that focuses on providing mortgages to clients throughout the United States. The firm’s founder, Anthony Hsieh, is famous for creating many popular lending platforms. After selling his previous ventures, LoanDepot is his most recent project. It remains privately owned.
While LoanDepot originally required human approval for certain types of loans, it has developed an automated system that uses a technology-based approach for streamlining the approval process. If you’re looking for a large online lender that offers considerable convenience, there’s a chance LoanDepot is the right partner for you.
On top of the company’s online lending platform, there is also a range of physical locations that customers can use to apply for loans in person. Unlike many online lenders, LoanDepot also caters to customers who want to head into a branch to apply for a loan. At present, there are over 150 LoanDepot locations around the country.
Let’s dig into the deeper details of this unique lender.
Table of Contents:
- Is LoanDeport a Reputable Lender?
- Is LoanDepot FDIC Insured?
- Mortgage Options
- Pros & Cons
- Is LoanDepot for You?
Is LoanDepot a Reputable Lender?
If you’re going to obtain a mortgage from a lender, you need to make sure you can trust them.
One of the best ways to gauge a lender’s reputation is to look at their consumer sentiment. LoanDepot is accredited with the Better Business Bureau (BBB), which is one of the nation’s largest consumer watchdog groups. The company’s current rating with the BBB is an ‘A’ — the second-highest rating available on the platform.
While there is plenty of positive feedback about LoanDepot on various consumer watchdog groups, it’s important to note that the company has recently had to settle a court case in the state of New York. While many lenders face legal challenges, it’s important to keep in mind that LoanDepot doesn’t have a perfect record.
Either way, LoanDepot is a large lender with an extensive client base throughout the country. This is certainly a legitimate lending partner if you’re looking for a reputable mortgage company.
Is LoanDepot FDIC Insured?
The LoanDepot FDIC insurance status is slightly vague. While LoanDepot itself is not FDIC insured, the lender used for personal loans is FDIC insured. LoanDepot makes personal loans via Cross River Bank, a New Jersey-based lender.
The FDIC, which stands for Federal Deposit Insurance Corporation, is a corporation run by the United States Government. Its primary purpose is to insure the deposits of depository institutions. The FDIC guarantees deposits of up to $250,000 for eligible institutions.
This insurance program protects consumers and instills confidence in the banking system. If you’re someone who is responsible with their money, it’s critical to work with an institution that is FDIC insured — it’s the only way to guarantee your deposit.
Mortgage Options with LoanDepot
If you do decide to seek a mortgage via LoanDepot, you’re probably curious as to which mortgage products they offer to their customers. Fortunately, LoanDepot has a wide range of mortgage products that can cater to the needs of various types of borrowers.
You can find most major mortgage products at LoanDepot:
- Fixed-Rate Mortgage
- Variable Rate Mortgage
- Jumbo Mortgage
- FHA Loans
- VA Loans
In addition to mortgages, you can also apply for mortgage refinancing. Again, LoanDepot offers both fixed and variable interest rates for refinancing.
Unfortunately, you won’t be able to find any USDA loans at LoanDepot. While the lender offers most of the popular government-backed loans, this is a notable exception. But don’t worry, there are plenty of other options available on the market.
LoanDepot previously offered personal loans to its clients, but it recently ceased this lending service. It now offers mortgage-type products exclusively.
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LoanDepot Mortgage Qualifications
LoanDepot has a minimum credit score of 620, but you should have a much higher credit score if you want a chance of being approved for a good interest rate. The best interest rates on the company’s website typically assume that you have a 740 credit score — you will also need a debt-to-income ratio of 35% or lower.
In addition, the minimum down payment for a loan is 3.5%. Again, you will need a very high credit score to access this low of a down payment.
In terms of fees, LoanDepot is quite secretive about its financing fees. It appears that the company sometimes imposes a fee of between 1% and 5%. The higher end of this range is extremely unreasonable when you compare it against other mortgage lenders on the market. It’s a good idea to clarify any fees before applying for a loan at LoanDepot.
Pros and Cons
There’s no such thing as a perfect lender. If you want to ensure you choose the best lender for your mortgage needs, it’s important to understand the pros and cons of each provider. Below, let’s explore the advantages and disadvantages of LoanDepot.
- You can pay your mortgage online
- You can apply for a loan with a 620 credit score
- You can complete your entire loan application online
- The firm offers both in-branch and online loan applications
- LoanDepot has a strong reputation on consumer watchdog groups
- Backed by an experienced mortgage lending team
- There is potential for high lending fees
- No USDA loans available
- You need a high credit score to access the best rates at this lender
Verdict: Is LoanDepot Mortgage Right for Me?
The answer to this question will depend on your financial situation and the type of loan that you’re hoping to obtain. While LoanDepot offers a broad range of mortgage products, it’s inconvenient that there aren’t any USDA loans available.
If you have a good credit score, you can access a good interest rate. Unfortunately, fees can be quite high with LoanDepot. Either way, if you do decide to work with LoanDepot, you’ll be partnering with a lender that has a strong reputation with consumers.
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