Rocket launches program to lower first-year mortgage payments

Rocket Mortgage and his wholesale arm Rocket Pro TPO will reduce homebuyers’ monthly mortgage payments by one percentage point for the first year of their loan.

Dubbed the “Inflation Buster” program, Rocket aims to give borrowers a reprieve from high inflation and affordability issues, the company said in a statement Friday.

Rocket Mortgage will cover the difference in mortgage payments during the first 12 months through a special escrow account. For Rocket Pro TPO, home sellers or real estate agents will fund the program, similar to a buyout program rival United Wholesale Mortgage launched last month. UWM announced that its temporary rate buybacks – fueled by seller concessions – would reduce borrowers’ interest rates by up to 2% for the first two years of a mortgage.

Rocket said a homebuyer with a 30-year, $400,000 fixed-rate mortgage with 5.75% interest would typically pay about $2,334 in principal and interest. With its anti-inflation program, the monthly payment would drop more than 10% to around $2,086, saving the borrower a total of $2,972.40 in the first year of their loan, Rocket said. .

“The Inflation Buster pairs perfectly with the Rate Drop Advantage program which covers a large portion of refinancing costs when interest rates drop,” Rocket Mortgage CEO Bob Walters said in a prepared statement. “Combined, these elements put buyers in the driver’s seat with unparalleled benefits.”

The Rate Drop Advantage program, launched in July, covers a portion of the closing costs of a refinance transaction if interest rates drop and borrowers refinance within three years of buying a home. The program waives appraisal, credit report retrieval, processing and underwriting fees for an average savings of about $2,000, depending on the lender.


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Amid inflation, uncertain economic conditions and increased competition in a shrinking mortgage origination market, Rocket rolled out a range of new products and increased its conventional loan limit to reach more borrowers and brokers .

In August and September, Rocket Mortgage and Rocket Pro TPO announced the offering of home loans to capitalize on record levels of real estate equity. Earlier this month, Rocket Pro TPO preemptively raised compliant lending limits to $715,000, becoming the first lender to do so ahead of the Federal Housing Finance Agency‘s announcement in November.

The lender said the new conforming loan purchase limit will offer better pricing, require a smaller down payment for home purchases and easier documentation compared to a jumbo loan.

A day after Rocket’s announcement, UWM said it would also increase conforming loan limits to $715,000.

Rocket companies, the parent company of Rocket Mortgage and Rocket Pro TPO, reported second-quarter earnings of about $60 million, up from $1 billion in the prior quarter. Loan origination volume fell to $34.5 billion from $53.8 billion in the same period and profit margin on sale also fell to 2.92% from 3.01%.

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