Author Topic: Any experience with loanDepot?  (Read 864 times)

appleshampooid

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Any experience with loanDepot?
« on: February 27, 2020, 07:24:43 AM »
Hi MMM friends, new to this sub-forum, usually hang out over on Investor Alley but figured this question was more appropriate here.

I am taking a hard look at current mortgage rates and thinking about refinancing. My current is 4.125% on a mid-400s balance and 27 years remaining.

A coworker turned me on to loanDepot who look like a pretty bargain basement provider. They have good rates and fees, but I am hesitant. My biggest question for this post is if anyone has done business with Loan Depot and if they have any experience or warning signs? FWIW I also quoted Rocket Mortgage and they gave me a worse rate, AND their website was worse and buggier.

Yesterday, loanDepot quoted me 3.25% with $11,817 in closing costs, about a 3-year payback window and roughly $300 reduction in monthly payment. Anyway, I'm thinking hard about it if rates drop another quarter percent or so. Criticism on my thinking here from a MMM perspective is welcome, I'd say 50/50 shot we are still in this house 3 years from now. Although the main purpose of my post here is discussion on loanDepot as I know there are many extant threads on the pros/cons of refinancing.


RWD

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Re: Any experience with loanDepot?
« Reply #1 on: February 27, 2020, 08:00:48 AM »
[...] with $11,817 in closing costs [...]

Holy crap!

appleshampooid

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Re: Any experience with loanDepot?
« Reply #2 on: February 27, 2020, 08:50:35 AM »
[...] with $11,817 in closing costs [...]

Holy crap!
Mid-400k balance on the principal, this doesn't seem out of line to me. Less than 3% total, and includes 0.790 points.

This is the first mortgage I have held, and would be my first refinance if I go through with it, so please point out if I'm wrong. Other providers have quoted higher total costs.

RWD

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Re: Any experience with loanDepot?
« Reply #3 on: February 27, 2020, 09:03:31 AM »
After you take into account the opportunity cost of the closing costs it's more like a 4-year payback period. Doing a quick search that sounds like it's on the low side for a refinance but the absolute dollar amount just seemed high to me. How much would it be without paying points?

appleshampooid

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Re: Any experience with loanDepot?
« Reply #4 on: February 27, 2020, 09:16:31 AM »
After you take into account the opportunity cost of the closing costs it's more like a 4-year payback period. Doing a quick search that sounds like it's on the low side for a refinance but the absolute dollar amount just seemed high to me. How much would it be without paying points?
I can't check right now at work, will run the numbers tomorrow on this.

appleshampooid

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Re: Any experience with loanDepot?
« Reply #5 on: February 28, 2020, 09:37:21 AM »
After you take into account the opportunity cost of the closing costs it's more like a 4-year payback period. Doing a quick search that sounds like it's on the low side for a refinance but the absolute dollar amount just seemed high to me. How much would it be without paying points?
I thought I mentioned, but didn't - all the closing costs, fees, etc. for this offer get rolled in to the new mortgage. So I wouldn't actually need to bring any cash to the table.

I'm assuming you computed the opportunity cost number here by assuming that money wouldn't be invested in the market, right? I don't think that applies to my situation.

appleshampooid

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Re: Any experience with loanDepot?
« Reply #6 on: February 28, 2020, 09:51:16 AM »
Got an offer of 2.99% but with a bigger chunk of points of course. Total cost on this offer would be about $16k, with about $7k cash to close and the rest rolled in to the loan amount. Still a 4-year payback period, not really interested in this offer.

RWD

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Re: Any experience with loanDepot?
« Reply #7 on: February 28, 2020, 09:52:47 AM »
After you take into account the opportunity cost of the closing costs it's more like a 4-year payback period. Doing a quick search that sounds like it's on the low side for a refinance but the absolute dollar amount just seemed high to me. How much would it be without paying points?
I thought I mentioned, but didn't - all the closing costs, fees, etc. for this offer get rolled in to the new mortgage. So I wouldn't actually need to bring any cash to the table.

I'm assuming you computed the opportunity cost number here by assuming that money wouldn't be invested in the market, right? I don't think that applies to my situation.
Yes, you are correct. I assumed you'd need to bring cash. So it is a minimal impact (higher principal means more interest paid).

appleshampooid

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Re: Any experience with loanDepot?
« Reply #8 on: February 28, 2020, 12:12:59 PM »
Got an offer of 2.99% but with a bigger chunk of points of course. Total cost on this offer would be about $16k, with about $7k cash to close and the rest rolled in to the loan amount. Still a 4-year payback period, not really interested in this offer.
Okay, revised offer from loanDepot. Still 2.99% rate.

Listed closing costs of $15,890, which my loan officer offered to discount by $6690 if I lock it in today (this whole process seems kind of sleazy).

Plus the closing costs include $2,243 of pre-paid escrow which is not money going out the door, it is staying in the escrow account to pay taxes. So take that off, and net closing costs end up $6957. P&I payment goes down $380...no cash to close...that's an 18 month payback window. I think I'm gonna do it.
« Last Edit: February 28, 2020, 12:16:37 PM by appleshampooid »

appleshampooid

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Re: Any experience with loanDepot?
« Reply #9 on: March 02, 2020, 05:05:31 AM »
Got an offer of 2.99% but with a bigger chunk of points of course. Total cost on this offer would be about $16k, with about $7k cash to close and the rest rolled in to the loan amount. Still a 4-year payback period, not really interested in this offer.
Okay, revised offer from loanDepot. Still 2.99% rate.

Listed closing costs of $15,890, which my loan officer offered to discount by $6690 if I lock it in today (this whole process seems kind of sleazy).

Plus the closing costs include $2,243 of pre-paid escrow which is not money going out the door, it is staying in the escrow account to pay taxes. So take that off, and net closing costs end up $6957. P&I payment goes down $380...no cash to close...that's an 18 month payback window. I think I'm gonna do it.
Slightly revised this...paid a bit extra to get taxes out of escrow but everything else stayed the same and pulled the trigger. $8000 total closing costs and still no cash to the table. Pretty happy with the loan parameters.

I will keep this thread updated with the loanDepot experience so others can learn from my journey.

theoverlook

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Re: Any experience with loanDepot?
« Reply #10 on: March 02, 2020, 09:21:13 AM »
Please do keep this updated; the ability to roll closing costs into the loan is nice. The rates sound good. All that remains is the closing experience and servicing, which can be big question marks!

appleshampooid

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Re: Any experience with loanDepot?
« Reply #11 on: Today at 02:54:11 PM »
We are closing this Friday on a refinance with loanDepot.