Offering Your Clients Interest Rate Protection With A Rocket Advantage
Kevin Graham3 minute-read
December 22, 2022
A highly competitive market was already posing challenges for home buyers, but rising interest rates can make things even harder. Still, people often want or need to buy homes regardless of the current rate environment.
Today, we’ll talk about two programs that give your clients the ability to protect their rate today while still being able to refinance affordably if rates drop in the future. This is the Rocket Advantage from Rocket Mortgage®.1
Purchasing A Home With RateShield®
If you’re buying a home in a rising rate environment, it’s to your advantage to lock your rate as soon as you can. However, it’s traditionally been required that you have a purchase agreement in place before you can think about locking your rate. And even if you can lock it, there’s the potential of clients kicking themselves if rates fall later.
This is where RateShield comes in.2 With this option, your clients can protect themselves against higher interest rates by locking for up to 90 days while shopping for a home. But it gets better. If interest rates fall at any point during that time frame, clients will have the one-time option to float down to the lower rate.
This protects them from the stress of having to worry about rates being higher while also saving them from thinking about what could have been if rates move down after they lock.
RateShield is also a Verified Approval.3 We pull the client’s credit to get an idea of the mortgage options they may qualify for. We also ask for documentation around their income and assets upfront. This way you and your clients can know exactly what they qualify for when they start looking at homes. Sellers and their listing agents will take your offers seriously. Rate certainty is a real bonus as well.
While that’s a great option for now, what about when clients want to take advantage of lower rates in the future? After all, there are costs associated with refinancing. That brings us to the second part of this equation.
Future Refi Savings With Rate Drop Advantage
By historical standards, rates have risen fairly quickly if we compare them to where they were at this time even last year. Seasoned real estate observers like yourselves will know that eventually the pendulum swings back the other way. Rates can go up, but they end up coming back down at some point.
With Rate Drop Advantage, clients who lock their initial rate and buy in today’s market can refinance to take advantage of lower interest rates while paying significantly reduced closing costs.4 They can take advantage of this any time between 4 months after the closing of their current loan and 3 years following.
As a lender credit, Rocket Mortgage® will cover various fees including appraisal, credit report, mortgage recording fee and tax certification. For clients who are ready, this is going to mean significant savings when they refinance.
This is something that could provide huge savings for your clients when you consider the dollars typically involved with closing costs. We suggest home buyers plan to spend between 3% – 6% of their loan amount. On a $250,000 loan, that’s between $7,500 – $15,000. Avoiding some of those costs makes the refinancing math problem that much easier.
The Bottom Line
RateShield and Rate Drop Advantage are designed to give your clients interest rate protection even if rates rise in the short term. The ability to lock your rate while shopping for a home and float down to a lower rate if available is a big deal for home buyers. If rates fall in the next 3 years, your clients will be able to refinance with a fraction of the closing costs.
These two programs represent a winning combination that gives your clients the Rocket advantage! We’re very excited to get these programs in front of you and offer your clients great new options. If this sounds right for the home buyers you serve, spread the news!
1 Rocket Mortgage, LLC; NMLS #3030; www.NMLSConsumerAccess.org. Equal Housing Lender. Licensed in 50 states. AL License No. MC 20979, Control No. 100152352. AR, TX: 1050 Woodward Ave., Detroit, MI 48226-1906, (888) 474-0404; AZ: 1 N. Central Ave., Ste. 2000, Phoenix, AZ 85004, Mortgage Banker License #BK-0902939; CA: Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act; CO: Regulated by the Division of Real Estate; GA: Residential Mortgage Licensee #11704; IL: Residential Mortgage Licensee #4127 – Dept. of Financial and Professional Regulation; KS: Licensed Mortgage Company MC.0025309; MA: Mortgage Lender License #ML 3030; ME: Supervised Lender License; MN: Not an offer for a rate lock agreement; MS: Licensed by the MS Dept. of Banking and Consumer Finance; NH: Licensed by the NH Banking Dept., #6743MB; NV: License #626; NJ: New Jersey – Rocket Mortgage, LLC, 1050 Woodward Ave., Detroit, MI 48226, (888) 474-0404, Licensed by the N.J. Department of Banking and Insurance.; NY: Rocket Mortgage, LLC, 1050 Woodward Ave., Detroit, MI 48226 Licensed Mortgage Banker-NYS Department of Financial Services; OH: MB 850076; OR: License #ML-1387; PA: Licensed by the Dept. of Banking – License #21430; RI: Licensed Lender; WA: Consumer Loan Company License CL-3030. Conditions may apply.
2 RateShield Approval is a Verified Approval with an interest rate lock for up to 90 days. If rates increase, your rate will stay the same for 90 days. If rates decrease, you will be able to lower your rate one time within 90 days. Please contact your Home Loan Expert for additional information. This offer is only valid on 30-year FHA, VA and conventional purchase loan products. RateShield Approval not eligible for clients with a signed purchase agreement, on Charles Schwab loans, or new construction loans. Additional conditions and exclusions may apply.
3 Your client’s participation in the Verified Approval program is based on an underwriter’s comprehensive analysis of their credit, income, employment status, debt, property, insurance and appraisal as well as a satisfactory title report/search. If new information materially changes the underwriting decision resulting in a denial of the credit request, if the loan fails to close for a reason outside of Rocket Mortgage’s control, or if the client no longer wants to proceed with the loan, their participation in the program will be discontinued. If the client’s eligibility in the program does not change and their mortgage loan does not close, they will receive $1,000. This offer does not apply to new purchase loans submitted to Rocket Mortgage through a mortgage broker. This offer is not valid for self-employed clients. Rocket Mortgage reserves the right to cancel this offer at any time. Acceptance of this offer constitutes the acceptance of these terms and conditions, which are subject to change at the sole discretion of Rocket Mortgage. This is not a commitment to lend. Additional conditions or exclusions may apply.
4 If client locks their initial rate on a purchase loan between 7/19/22 and 2/28/23 and that loan closes, client is eligible for Rate Drop Advantage. Refinance offer must be claimed by locking initial rate between 120 days and 36 months from purchase closing date. Refinance loan must be on the same subject property as the original purchase loan. Rocket Mortgage will cover the following fees as a lender paid credit: first appraisal fees, credit report, tax certification, mortgage recording fee, flood certification and life of loan, notary fees in Pennsylvania and New York, and if a conventional loan, processing and underwriting fees. Rate Drop Advantage is only valid on conventional conforming and government loans in our retail channels. Offer may not be redeemed for cash or credit and is nontransferable. Offer cannot be retroactively applied to any loans. Offer may not be used with any other discounts, promotions or interest-only/buy-down and second lien products. This offer is subject to changes or cancellation at any time at the sole discretion of Rocket Mortgage. Additional restrictions/conditions may apply. This is not a commitment to lend and is contingent on qualification per full underwriting guidelines.
Refinancing may cause finance charges to be higher over the life of the loan.
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