Any experience with loanDepot?

[appleshampooid]

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]

[...] with $11,817 in closing costs [...]

Holy crap!

[appleshampooid]

[...] 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]

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]

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]

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]

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]

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]

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.

[appleshampooid]

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]

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]

We are closing this Friday on a refinance with loanDepot.

[mbk]

I refinanced with loan depot in Jan.  They gave the lowest rate right out of the box,  which no one else was able to beat. The whole experience was without any issues. Later the loan was bought and now being serviced by chase.

I am using them for an upcoming purchase as well.

[alleyquit]

I don't have any idea about it before...but now get some idea to you.

[appleshampooid]

I refinanced with loan depot in Jan.  They gave the lowest rate right out of the box,  which no one else was able to beat. The whole experience was without any issues. Later the loan was bought and now being serviced by chase.

I am using them for an upcoming purchase as well.

Good to hear. We have our first payment which goes directly to loanDepot on June 1st and then it will probably be sold. I guess there is a chance they keep it and service it based on the verbiage in the closing docs.

I would be fine if they sold it to Chase. At this point, a big bank with a usable website, sane payment options (EFT etc.), and integration with Mint is my biggest want.

[appleshampooid]

Only snag so far - loanDepot took a quarter's worth of property tax at closing which was due to my town on May 1st. I opted out of escrow on this mortgage, so for all future payments I'll be handling it directly. But I guess there is some regulation based on when the refinance closed that this payment had to be part of closing.

As of today (May 4th) our town hasn't received the funds yet, which is annoying. I've contacted my rep at loanDepot to make sure it's in progress.

[appleshampooid]

Received notification last week that loanDepot did NOT sell my mortgage, they'll be servicing it directly. Which is surprising to me, as most folks I talked to who had used them had their loan sold off immediately.

Website seems usable, works with Mint. So far so good.

[Cassie]

They were absolutely incompetent and horrible to deal with. We have had many mortgages and no one was worse than them.

[iluvzbeach]

We used them in 2015 to make our purchase and we had a great experience with them. We actually got paid points (to us) which covered all closing expenses. Rate was slightly higher but we turned around and paid it in full about 18 months later. It was a great deal for us.

I should mention we paid most of the principal balance about six weeks after purchase and immediately recast the loan. Again, no trouble with this process and we were very happy with the service they provided.

[SndcxxJ]

Just a quick post for anyone else shopping mortgages right now. 
I obtained quotes from loan depot and a number of other brokers in the area.  Loan depot had the lowest rates, but by far the highest cost to refinance (lender fees plus points).  I could get a minimally higher rate at less than half the cost elsewhere.  It would have taken 12 years for the lower rate to break even with the higher loan cost, so I didn't go with them.   As with any major expense shop it around and crunch the math to see what is best with your timeline and needs.

[mbk]

Just a quick post for anyone else shopping mortgages right now. 
I obtained quotes from loan depot and a number of other brokers in the area.  Loan depot had the lowest rates, but by far the highest cost to refinance (lender fees plus points).  I could get a minimally higher rate at less than half the cost elsewhere.  It would have taken 12 years for the lower rate to break even with the higher loan cost, so I didn't go with them.   As with any major expense shop it around and crunch the math to see what is best with your timeline and needs.

Yes, loanDepot have higher costs. Last time, I went to another company with the loanDepot's offer, got a competing offer with the same rate, but lower costs, and then went back to loanDepot to cut down the cost as well. I stuck with them because they gave their best rate the first time itself, which others only matched. I am closing another loan from them in 10 days with 5% down. This time I couldn't play the trick because my other go-to lenders were not approving my loan with 5% down in these covid times.

[CupcakeGuru]

I am in the process of refinancing now. Loan Depot and Rocket had the lowest rates about 2.99 to 3.025 but their fees were astronomical. The fees were in the 7,000 to 8,000 range (without escrow and property taxes). I ended up going with Chase at a slightly higher rate of 3.125 with closing cost about 2,100.

[August26th]

It’s a simple trick.... lure you in with crazy low rates but when it comes time to send you the actual estimate, their fees are crazy high. But hey, they offered that low rate.

Some online lenders are worth it. Many are not.