LoanDepot Mortgage Review: Many Options, Average Value

LoanDepot Mortgage Review: Many Options, Average Value

LoanDepot has a wider variety of mortgage products than the typical direct lender, but its rates and fees aren't much different from the competition.

Good for

  • Full set of conventional, jumbo, FHA and VA loans
  • Additional home equity and personal loan options
  • Online interface offers on-demand application process

Bad for

  • Average interest rates and fees
  • Requires account creation to access detailed mortgage information

Editor's Rating

3.5/5.0

LoanDepot's many different home loans and online application make it a convenient one-stop solution if you aren't looking for anything specific in a mortgage lender. However, it appears less useful for people who are more concerned with cutting down their fees and interest rates. To find out where loanDepot stands, we compared the details of its loans and service against other popular lenders.

LoanDepot Mortgage Review: Diverse Products in an Online Platform

LoanDepot works best as a mortgage lender if you want to see as many different options as possible for your home loan. Although we didn't see particularly low interest rates or fees among loanDepot's mortgages, the company covers a much bigger selection of mortgage types than your average lender. It's one of the only direct lenders where you can also find home equity loans and personal loans.

In addition, loanDepot makes a point of providing its many home loan products through a convenient online application. While it doesn't yet appear to have a mobile app, its website allows you to create an account and move your loan process forward at your own pace. While its loan officers are available by phone, customers who prefer to go through the website can upload documents and see their quotes online. However, loanDepot provides relatively little information until you commit to creating an account.

How Do loanDepot Mortgages Compare?

The standard 30-year mortgage rate at loanDepot was close to the average of our top lenders, but the company's site notes that this published rate may require the purchase of discount points. Since loanDepot doesn't provide custom rate quotes, we used the company's assumptions to obtain customized estimates from other lenders.

30-Year Fixed Rate Mortgage Estimates at Major Banks

loanDepotChaseBank of AmericaWells Fargo
Interest Rate4.00%3.63%3.75%4.00%
APR4.20%3.85%4.01%4.08%
Monthly P+I$764$730$741$764
Pointsup to 31.880.360.00
Cost of Pointsup to $4,800$3,008$576$0

Estimates for a $200,000 home purchase with 20% down payment and credit score of 740

According to these quick estimates, loanDepot's mortgage rate compares poorly to what you'll find at a national bank. Although the nominal rate looks similar, loanDepot publishes a mortgage rate that may or may not include the effect of up to 3 points purchased on the loan. Depending on the amount you plan to borrow, buying discount points to lower your mortgage rate can add thousands of dollars to your closing costs. You may be able to secure a lower rate without any points if you have excellent credit or a larger down payment.

However, loanDepot's mortgage programs have at least one benefit for long-term customers. After your first refinance at loanDepot, the company will cover both the lender fees and appraisal fees if you choose loanDepot for any future mortgage refinance. Given that most mortgages are held for 5 to 7 years, this is more of a long-term advantage than an immediate gain. However, lender fees and appraisals usually cost over a thousand dollars combined, making loanDepot's waiver offer a significant chance to save later on.

Customer Service and Mortgage Servicing

LoanDepot is a much smaller mortgage lender than any of the major banks in the US, which may help explain how the company has managed to keep its rate of complaints at a minimum.

Mortgage-Related Complaints at Major Banks, 2013-2017

CompanyMortgage OriginationsCFPB ComplaintsRatio2016 JD Power Rating
loanDepot43,9784070.93%831
Chase948,00014,7781.56%835
Bank of America1,172,11328,1872.40%832
Wells Fargo2,155,22225,1821.17%832

WIth fewer than 1 in every 100 customers reporting service-related issues, loanDepot had a slight edge over Chase, Bank of America and Wells Fargo in customer satisfaction. The lender's advantage over these large banks was apparent even after accounting for their differences in loan volume. While your experience in obtaining a mortgage depends heavily on the quality of your individual loan officer, the data indicate that loanDepot gives you a slightly better chance at avoiding major headaches along the way.

However, loanDepot's claims to be a more tech-savvy option only come into play once you log in to start your application. Its website actually doesn't share much information on the interest rates and fees you can expect—unlike the major banks, whose websites include customizable tools for estimating your loan details. To get the most out of loanDepot's online services, you'll need to create an account and sign in. From that point, you'll have the benefit of a step-by-step application that guides you through the process of obtaining a quote.

Home Loan Products at loanDepot

What loanDepot might lack in low interest rates, it makes up for in the sheer variety of its mortgage products. While most direct lenders choose to concentrate their business in one particular area of mortgage lending, loanDepot provides conventional, jumbo and government-backed loans for consumers at every level.

Mortgage ProductInterest RateAPRMonthly Payment
30-year fixed rate4.00%4.20%$764
15-year fixed rate3.13%3.55%$1,115
5/1 ARM3.38%3.94%$708

Estimates for a $200,000 purchase loan with 20% down and credit score of 740

LoanDepot only publishes rates for the three most popular conventional mortgage types, but its offerings also cover people who want a jumbo loan on a more expensive property. If you're wrestling with the cost of a down payment, an FHA loan or VA loan (if you're a veteran) at loanDepot could help reduce that upfront expense. While interest rates on these other home loans aren't available without a full loan estimate from loanDepot, it's unlikely that they'll save you much more than other lenders.

The diversity of products at loanDepot means that you'll also find loan products other than the typical mortgage, including home equity loans. LoanDepot allows borrowers to take out home equity loans on top of their existing mortgages, for up to 90% of the equity they have in the value of their homes. While this increases your total debt, home equity loans are difficult to find at direct online lenders. Choosing loanDepot for your first mortgage may make it easier to obtain a home equity loan with the same lender later on.

Where Can You Get a Mortgage With loanDepot?

LoanDepot is licensed to lend in all 50 states, which boosts its value as a comprehensive choice for home financing. While it might not be specialized in any one type of home loan, loanDepot's smooth web experience, diversity of products and wide availability make it a versatile choice. If you're obtaining quotes from multiple lenders to compare your options, loanDepot is an easy lender to add as part of your shopping.

How Does loanDepot Compare to Today's Mortgage Rates?

If you're interested to see how other lenders compare to loanDepot, see the table below to discover alternative mortgage options.

LenderAPRMonthly PaymentLoan Fees
Homestead Funding Corp5.044%$858.91$795.00Inquire Now
Flagstar Bank5.196%$871.18$1,278.00Inquire Now
Ally Bank5.268%$883.53$317.00Inquire Now
First Internet Bank of Indiana5.282%$883.53$566.00Inquire Now
Citibank, N. A.5.431%$883.53$3,190.00Inquire Now

Rates assume a home purchase of $200,000 in New York with a 20% down payment and credit score of 740. Estimates include origination fees and points but don't include other closing costs.

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