loanDepot Mortgage Lender Review 2021: Offers Most Loan Types, But Ask About Fees

A photo to accompany a review of loanDepot Illustration/NextAdvisor
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loanDepot Overview

Originating $275 billion in consumer loans since it launched in 2010, loanDepot is the second-largest nonbank retail mortgage lender in the U.S. We’ve ranked it as one of the best mortgage lenders of 2021 because it has accumulated few complaints, operates in all 50 states, and offers special discounts for repeat customers. 

Plus, there are plenty of choices when it comes to loan programs and the customer experience. Applicants can either receive in-person help at more than 200 branches nationwide or complete the mortgage process entirely online. The lender says its online closings are 75% faster than the industry average, and in some cases closings take just eight days.  

LoanDepot is headquartered in Foothill Ranch, California, and offers conventional loans, government-backed mortgages, renovation loans, and refinance loans.

Pros and Cons of loanDepot

Pros

  • Offers digital verification for borrower income, assets, and employment.

  • Offers most major loan types, including renovation loans.

  • Operates online in all 50 states, and customers can get in-person help at more than 200 affiliated loan stores nationwide.

  • If you decide to refinance an existing loanDepot mortgage, the company will waive the lender fees and reimburse appraisal fees.

Cons

  • Information about mortgage rates and fees isn’t available online. You’ll need to contact a loan officer via phone, email, or office visit.

  • LoanDepot doesn’t offer U.S. Department of Agriculture loans, home equity loans, or home equity lines of credit.

loanDepot: Loan Types and Products

LoanDepot says it has more than 300 loan products, so whether you need to purchase a home or refinance an existing mortgage, you’ll probably find what you’re looking for. Right now loanDepot offers the following major types of mortgages:

LoanDepot also offers a choice between fixed-rate and adjustable-rate mortgage (ARM) loans. With an ARM, the rate will be fixed for the first three, five, seven or 10 years. After the fixed period ends, the rate may increase or decrease annually for the rest of the loan term. 

You may notice a few options missing from loanDepot’s lineup, though. The company doesn’t offer U.S. Department of Agriculture loans, home equity loans, or home equity lines of credit

loanDepot Transparency

LoanDepot’s website can be confusing. While you’ll find mortgage calculators and information about loan programs and the homebuying process, some of the content is repetitive and organized in a way that’s not always clear. 

The blog and website reference pages also lack answers about how loanDepot will specifically handle your mortgage and tools to estimate your own loan terms. For example, one of loanDepot’s web pages says borrowers should be aware of closing fees, prepaid interest, and prorated items such as property taxes and homeowners insurance. But there’s no specific guidance on what you might pay for these items if you take out a loan with the lender.

So you’ll have to call loanDepot’s customer care line to get some critical questions answered.

loanDepot: Rates and Fees 

LoanDepot’s website doesn’t advertise daily refinance and purchase rates, as some of its competitors do, and doesn’t offer a list of lender fees. This can be frustrating for buyers looking to quickly compare loan offers. Although several links seemingly lead to sample rates—such as “home loan rates,” “refinance rates,” and “compare mortgage rates”—clicking on them only leads to loan term definitions, not actual rate quotes. 

Pro Tip

If you’re looking to save money, request a loan estimate from several lenders. Compare the interest rate, APR, and closing costs. When you identify the best deal, ask another lender to beat the rate or lower the closing costs. It’s the best way to come out ahead.

But you can call loanDepot and work with a loan officer to estimate your rate. When you do receive a rate quote, it’s a good idea to check the interest rate, annual percentage rate (APR), and any fees the lender charges, such as discount points. A discount point, or mortgage point, is an optional fee you can pay at closing to lower your interest rate. This can be a good option for some borrowers, but you’ll want to know whether you’re paying the fee before taking out the loan.

To qualify for a mortgage with loanDepot, the minimum credit score varies depending on the type of loan you want to take out. For example, conventional mortgages require a score of at least 620. For FHA loans, your credit score can be as low as 580. But a higher credit score can help you receive the best mortgage rates.

You can lock in your interest rate for between 15 and 270 days, but extending the lock can get pricey. The extension fee is equal to a quarter of 1 percentage point of the loan balance. So if you’re borrowing $200,000, for example, the fee would come out to $500 for every 15 days you extend the lock.

LoanDepot has no application fees or prepayment penalties for any of its loans, but the lender does charge a late fee if a borrower is more than 15 days late on a mortgage payment. 

You can call the lender to get a full breakdown of the fees you might pay on a refinance or purchase mortgage. We obtained a sample fee worksheet to get an idea of the closing costs involved: 

  • Appraisal fee
  • Credit report fee
  • Tax service fee
  • Flood certificate
  • Processing fee
  • Underwriting fee
  • Costs associated with your title search (you can shop for some of these services)
  • Recording fees

Refinancing With loanDepot

Refinancing with loanDepot does come with a major benefit: the “lifetime guarantee.” If you take out a mortgage with loanDepot and later refinance with the company, it will waive your lender fees and reimburse your appraisal costs.

But you will pay fees if you refinance a loan that was originated through a different lender. The specific fees you pay will vary, depending on factors such as the type of loan and where you live. 

You might close on the loan more quickly, though, as the lender recently revamped its online application software. The “mello smartloan” is an end-to-end online application that helps you find the best loan for your situation, verifies your financial and employment details, pulls your credit, and handles the other details of your loan—all in a faster time frame compared to the industry average. 

loanDepot Compared to Other Mortgage Lenders

loanDepotFairway Independent Mortgage Corp.Movement Mortgage
Minimum credit score620 for conventional loans; 700 for jumbo loans; 580 for FHA loans; 620 for VA loans620 for conventional loans; 660 for jumbo loans; 600 for FHA loans; 600 for VA loans580 (some mortgage programs may require a higher score)
Minimum down payment0% to 5%0% to 5%0% to 3.5%
Where does the lender operate?All 50 states All 50 states All 50 states
Major loan typesConventional, jumbo, VA, FHA, FHA 203(k) renovation loan, adjustable-rate, fixed-rate, refinance, cash-out refinanceConventional, jumbo, VA, FHA, USDA, various renovation loans, adjustable-rate, fixed-rate, refinance, cash-out refinance, reverse mortgages, home equity loans, home equity lines of creditConventional, jumbo, VA, FHA, USDA, various renovation loans, adjustable-rate, fixed-rate, refinance, cash-out refinance, reverse mortgages

How to Shop Around to Get the Best Mortgage Rate

Mortgage rates can fluctuate every day and even by the hour, and every lender has its own formula for setting a borrower’s rates and fees. So it’s important to shop around and compare offers so you know you’re getting the best deal.

The only way to accurately compare offers is by submitting an application with multiple mortgage companies. The lender will go over your application, pull your credit, and provide you with a mortgage Loan Estimate. Use this to compare the interest rate, APR, and lender fees — and don’t be afraid to ask questions. You might be able to negotiate, too. Send the best offer to another lender, and ask them to beat the interest rate or closing costs. Having good credit can help here, as mortgage lenders may compete for your business. 

Each application may trigger a hard inquiry on your credit reports, but credit-scoring companies know consumers shop around. FICO will treat all mortgage inquiries made within 45 days as just one inquiry. Try to submit your mortgage applications within this window to minimize the impact to your credit.

Bottom Line

LoanDepot is a solid lender that offers help both online and in person at more than 200 offices nationwide. While the website offers a lot of general information on the homebuying process, your best bet is calling the lender to receive a rate quote and get information on fees you might pay. Once you receive a customized offer, you’ll still want to shop around for the best deal.