In a bid to assist extra renters make the leap to homeownership, Rocket Mortgage has launched a brand new program known as “RocketRentRewards.”
Because the title suggests, now you can earn rewards merely for paying your lease every month.
Particularly, renters get 10% of their lease for the previous 12 months as a credit score towards closing prices.
For instance, when you presently pay $2,000 monthly, you’ll get $2,400 for a yr’s price of lease.
This quantity can then be utilized to closing prices in your mortgage to scale back your out-of-pocket bills.
How RocketRentRewards Works
To be able to participate on this new program from Rocket Mortgage, you merely have to be a renter who applies for a house mortgage with Rocket.
When you apply, Rocket will take a look at your lease funds from the previous 12 months that may be verified with documentation (one other vital cause to not pay money!)
After confirming your present rental quantity, they’ll a number of that quantity by 12 after which offer you 10% of that complete.
For instance, they cite a nationwide common lease of $1,800 monthly, which interprets to $21,600 yearly.
If we take 10% of that quantity, it’d be $2,160, which might then be utilized towards your mortgage closing costs.
There’s a restrict of $5,000 supplied through this program, which means the credit score caps out at a month-to-month lease of about $4,200.
However the lease might theoretically come from a number of properties when you occurred to maneuver prior to now yr as a result of they think about all rental funds during the last 12 months.
Typical closing prices embody issues just like the loan origination fee, underwriting and processing charges, title insurance, residence appraisal, and so forth.
These quantities can add up in a rush, and when mixed with a down fee, can show to be a significant barrier to homeownership.
Within the launch, Rocket famous that “renter households have grown quickly” since 2020, now accounting for over a 3rd of houses in america.
And practically half of renters are individuals of coloration, about twice the speed of householders, in response to a Joint Middle for Housing Research of Harvard University report.
The corporate believes RocketRentRewards can assist bridge the hole, particularly in underserved communities, which can signify greater than half of first-time home buyers by the yr 2030, per a latest Fannie Mae examine.
Good Deal or Not? It Relies upon…
This can be a good new perk for these trying to make the move from renting to owning, however as all the time, we have to decide if it’s a deal or not.
To find out this, you’ll want to check all of the parts of a mortgage provide, together with the mortgage interest rate, closing prices, and any relevant credit.
On this case, you may earn as much as $5,000 in closing value credit, however you’ll want to take a look at the web closing prices.
For instance, if closing prices are $10,000, you’d solely pay $5,000 with the utmost renter credit score.
Then you definately’d want to take a look at the mortgage fee, which everyone knows, the decrease the higher.
Mortgage firms can present lender credits that reduce your out-of-pocket closing costs in alternate for the next mortgage fee.
But when their fee remains to be decrease, even with these prices absorbed, they’d be the higher deal.
So it’s vital to take a look at the deal holistically to find out who is definitely providing the most effective worth.
This may be achieved extra simply by wanting on the mortgage APR, although be sure all charges are accounted for.
And as all the time, take the time to assemble a number of mortgage fee quotes, since studies prove more quotes equal more savings.
Tip: You may earn factors on lease with Bilt Mastercard and redeem the factors at a worth of 1.5 cents per level for a mortgage down fee!
Can This Be Used with Different Rocket Packages?
One other consideration is that if RocketRentRewards can be utilized alongside different packages supplied by Rocket.
For instance, there’s the Rocket Rewards Loyalty Program, which permits customers to finish sure actions for closing value credit.
And Rocket’s BUY+ that gives a credit score of as much as $10,000 while you use a Rocket Houses Companion Actual Property Agent to discover a residence.
To not point out the Rocket Visa Signature Card, which permits cardholders to earn 5% again towards a down fee on a house buy.
I additionally marvel if this can be utilized at the side of Rocket Mortgage ONE+, which is their 1% down mortgage that makes use of a 2% grant to get to a 3% down fee, the minimal required for a conforming loan backed by Fannie Mae.
Assuming you possibly can mix some or all of those provides, Rocket could be arduous to beat. However as famous, different banks and lenders provide related perks, credit, and grants as properly.
So put within the time to buy round as you’ll every other buy. And much more time because it’s a house buy!
Learn on: How to reduce closing costs on your mortgage.
Earlier than creating this website, I labored as an account government for a wholesale mortgage lender in Los Angeles. My hands-on expertise within the early 2000s impressed me to start writing about mortgages 19 years in the past to assist potential (and current) residence patrons higher navigate the house mortgage course of. Observe me on X for warm takes.
