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The competition between the nation’s largest lenders to give homeowners a break continues.
Detroit-based Rocket Mortgage, the nation’s largest mortgage lender, today launched Inflation Buster, a program that reduces homeowners’ monthly mortgage payments by one percentage point for the first year of their loan.
The lower rate is accomplished through a special escrow account established and fully funded by Rocket Mortgage, the company said. Under the program, during the first 12 months the homeowner will make reduced mortgage payments, and Rocket Mortgage will cover the difference automatically.
"Rocket Mortgage is committed to creating solutions to combat today's high inflation, making home purchases more affordable," said Bob Walters, Rocket Mortgage CEO. "The Inflation Buster pairs perfectly with Rate Drop Advantage program, which covers many of the costs to refinance when interest rates fall. Combined, these put buyers in the driver's seat with unmatched benefits."
Rocket’s announcement follows temporary rate buydowns announced last month by its crosstown rival, United Wholesale Mortgage. UWM announced that its temporary rate buydowns would lower borrowers’ interest rates by up to 2% for the first two years of a mortgage.
With Rocket’s program, a homebuyer with a $400,000, 30-year fixed mortgage with a 5.75% interest rate would traditionally pay $2,334.29 in principal and interest. With Inflation Buster lowering the client's payment by one percentage point for the first year, however, their payment would drop more than 10% to $2,086.59, Rocket said.
The homeowner in this illustration would save a total of $2,972.40 in the first year of their loan, it said.
Rocket Mortgage is giving homebuyers more flexibility in their payment for the first year — a time when they are usually buying new furniture, décor, making improvements or customizing the home to fit their style, Rocket said.
The lower payment will be automatically provided to any Rocket Mortgage clients who apply for a conventional, FHA, or VA purchase loan, the company said. Rocket is also extending the offer to mortgage brokers' clients through Rocket Pro TPO, with funding coming from the real estate agent or home seller, it said.
Homebuyers can go to RocketMortgage.com to learn more and apply for a home loan. Mortgage brokers can learn about the program at RocketProTPO.com or they can talk to their account executive, the company said.