Rocket Pro TPO continues to adapt its strategy as the market changes. While some major players in the industry are struggling to keep up, leading them to shut down business or pull out of wholesale, Rocket is getting ahead of the game by rolling out some unique offers.
Today, Rocket announced it will increase its conventional loan limits to $715,000, doing so before the FHFA is expected to increase the loan limit in November. The current limit on conventional loans is $647,200, so partners and clients of Rocket will have a huge advantage over their competitors, the company said.
“We’re taking the loan limits up over 10% from where they’re at today,” said Austin Niemiec, Rocket’s executive vice president of wholesale lending. “Brokers can start sending in new applications today and set new locks today. It’s not official until November, but because of our platform we’re able to provide the new loan limits and fund them.”
Other lenders, like United Wholesale Mortgage, are rolling out more Jumbo products to adjust for higher home prices. However, these have more stringent requirements for borrowers and higher interest rates, and they typically take longer to close.
These tougher requirements are in place for a reason, though — to ensure borrowers aren’t biting off more than they can chew. Niemiec said Rocket isn’t worried about clients overborrowing, because conventional guidelines are enough to ensure the borrower's financial credibility.
“These loans still come with all the great guidelines that are in place by Fannie and Freddie, so these are incredibly quality loans, but by increasing the loan limit it’s going to have more folks qualify for a conventional loan versus a jumbo,” he said. “So you’re going to see better rates and pricing. There will be less money down on purchases, which is huge, and more cash out on refinances. A conventional loan is typically an easier process with easier documentation compared to a jumbo loan, so it’s a win-win situation all around.”
Niemiec is confident that being the first to roll out higher conventional loan limits will put Rocket ahead of its competitors. Rocket partners can now be the first to market this product, not only to clients but agents as well. This gives brokers a huge competitive advantage over their peers, and helps their borrowers stand out when it comes to competitive offers, he said.
Conventional loans are typically more attractive to a seller compared to jumbo loans. It gives clients better interest rates, lower monthly mortgage payments, and allows them to close on their home faster.
In addition, Rocket said it will roll out a new home equity loan product later in September, which it expects to increase in demand very soon.
“When you look at America, there has never been more equity in homes in the history of our country, but there has also never been more debt,” Niemiec said. “Especially because credit card debt is at an all-time high, so our new home equity loan will give consumers and brokers another option to tap into that record-level equity.”
Rockets offers a 90% loan-to-value ratio, which is substantial compared to the typical home equity loan and allows consumers to tap into more of their equity. Rocket has 10- and 20-year terms for its home equity loan, with a fixed interest rate. Most other home equity loans offer adjustable rates, so having a fixed product is valuable in a rising rate environment.
Rocket also offers these products on its elite technology platform, reducing the pain of getting these deals closed for brokers, it said. Most home equity loans (HELOCs) can take months to close, whereas Rocket’s grid portal can close them in weeks.
“Prices are on the rise, interest is on the rise, high interest debts are on the rise, but the one beautiful thing is equity is there. Americans have more equity now than ever,” Niemiec said. “That’s the reason for our urgency to roll out this product. Consumers need it now.”
"We have a couple of unique products that will help keep payments low for borrowers in the short term while we try to correct this inflation issue as a country," he added. "So there's more to come."
