SoFi has found a niche in the mortgage business by catering to high-earning borrowers looking for jumbo loans who don’t have enough saved for a traditional down payment. Most lenders won’t tread these waters, requiring stiff credit qualifications and more likely rejecting applicants when compared to SoFi.
Not only that, SoFi does not charge any origination fees nor mortgage insurance, boosting the value of its products as low-cost home loan options.
Mortgage Options & Rates
SoFi offers just four mortgage products with a minimum down payment of 10%: 30-year fixed, 15-year fixed and 7/1 adjustable-rate mortgages (ARM), as well as 5/1 ARM interest-only. The lender does not participate in any government-backed programs like FHA or VA loans.
30-year fixed. Enjoy fixed payments that won’t change over time.
15-year fixed. Pay your loan off faster while maintaining a constant rate and payment.
7/1 ARM. Fixed rates are at their lowest for the first seven years, then adjust annually.
5/1 ARM interest-only. Pay only interest for the first 10 years, then pay back principal over the next 20 years.
To reduce SoFi’s interest rates, you can buy it down with mortgage points, which will lessen your monthly costs throughout the loan term. Because SoFi does not charge origination fees on its mortgage products, you can use the money saved on this cost towards points or your down payment.
Although your down payment might be less than 20%, SoFi does not require its borrowers to take out private mortgage insurance (PMI) on jumbo loans. Instead, SoFi offers lender-paid mortgage insurance (LPMI) with a loan-to-value ratio greater than 80%. Most other lenders insist on PMI if you put less than 20% down to protect against loan delinquency.
If you’ve already taken out a SoFi loan, you’ll get a 0.125% rate discount, just for being a loyal customer. That’s something to think about if you plan on applying for additional loans in the future.
SoFi started originating mortgages in 2014, so it’s still a “baby” in the industry. However, the company definitely puts in the added service effort by providing benefits beyond lending, like community events and career advice.
From the years 2014 to 2017, SoFi has originated 2,297 mortgages with only four complaints to the Consumer Financial Protection Bureau (CFPB). That’s an extremely low rate (0.17%) in customer dissatisfaction. Let’s see how SoFi compares to major banks in the complaints department below:
|Bank of America||1,172,113||28,187||2.40%|
SoFi is licensed to originate mortgages in 30 states and Washington DC. You can’t apply for a mortgage with SoFi if you’re purchasing or refinancing in the following states:
The ideal SoFi customer has a high, solid income, a bit of money saved up, and a history of making payments on time. To apply, you’ll need at least 10% of the purchase price for a down payment, even on jumbo loans.
SoFi’s unique application process factors education and career history into the approval decision. Even if you have student loans or other debt, your professional background could improve your chances of getting approved for a SoFi mortgage.
SoFi offers a digital application that can be completed entirely online to make the process easier for borrowers. In one sitting, SoFi gives you an upfront loan approval, showing potential sellers that you are deemed a trustworthy and qualified buyer with the financial ability to purchase a home.
Here’s a step-by-step guide so you know what to expect:
- Get started. Enter all of your personal information (name, address phone number, etc.) to set up your online account.
- Mortgage eligibility. Enter details to help SoFi determine your ability to take out a new loan or refinance (state and country, primary residence or not, marital status, child support or alimony expenses, etc.)
- Check My Rate. Enter your purchase price, down payment and loan amount to get an accurate quote from SoFi.
- Rate Quotes/Preapproval. SoFi will present you with a variety of loan products and options. After selecting one, you can continue the preapproval process and loan application online.
If you have a stable income, but a high debt-to-income ratio, then you should consider getting a loan quote from SoFi. The online lender has nontraditional standards that show leniency towards applicants that have large amounts of student debt. SoFi does not charge origination fees nor does it require you to pay mortgage insurance, even if your down payment is less than 20%. These factors combined make SoFi an accessible choice for younger borrowers who don’t think their financial background is strong enough to get approved by standard lenders.
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