Sofi Mortgage Review 2019
Sofi is changing the mortgage game as one of the first online only lenders. They began originating home loans in 2014 so they are still very new on the scene. There are currently only a handful of registered complaints against the lender. This might be due to their newness, but could also mean that people are really happy with their services. Sofi mortgage products are available in 42 states including Washington DC.
Unfortunately, you will not get to take advantage of Sofi’s offers in Virginia, West Virginia, Ohio, Massachusetts, Missouri, South Carolina, Nevada, and Hawaii. Besides mortgages, you can get refinancing for mortgages and students loans as well as personal loans. More than half of their home loans are for first time home buyers and about half of their home loans are in California.
- Full Online Loan Process
- No Hidden Fees
- Unique Underwriting Process
- Ideal for No credit history/First Time Homebuyers
- Online Only Lender
- Higher Rates
- Lacking in Loan Products
- Not a National Lender
Sofi – The Ultimate Online Lender
Sofi’s target customer would be young professionals, recently graduated with a bright future and high earning potential ahead. Sofi caters best to those looking for an entirely online loan process, but don’t worry a mortgage professional will still be assigned to you for assistance.
When you take a look at Sofi it is easy to why they are so popular by putting on community events, networking events, and career services. Sofi also has another swaying factor, the do not charge an origination or application fee. They are also flexible with borrowers having a limited credit history.
If you can prove you are earning a reliable income, chances are you fit Sofi’s bill. Things like career history, educational background, and even student loan debt factor into the applications process.
How Does Sofi Mortgage Work?
Sofi is such a unique and interesting lender is that they are really one of the first and few companies to provide an online only loan process. You can only get a loan through them by applying and completing the application process online.
Sofi will assign a loan officer to you, but you will not meet them face to face. All support will come from online and telephone communication. Sofi also does not charge any fees. You can apply and have your loan processed without selling out any cash. The majority of lenders will charge an application fee, origination charge, or both. The tradeoff to Sofi’s no fees approach is that you will most likely get a higher interest rate than some other lenders.
Sofi mortgages have another interesting advantage in that you do not have to pay private mortgage insurance. PMI protects the lender if the borrower defaults on their loan. This is a risky strategy for Sofi, but again it offers the buyer major savings.
Sofi Mortgage Products, Fees, and Conditions
- Fixed Rate Mortgage – Available in 15 and 30 year terms with rates around 4.1 to 4.6%. Down payments can be as low at 10 percent and buyer does not pay private mortgage insurance. Fixed rate mortgages are ideal for home buyers who want to stay in their house long term.
Fixed rate mortgages also offer you predictability with a set interest rate and payment for the life of the loan. Most lenders require about 20 percent down a fixed rate mortgage and often times you will have to pay for mortgage insurance. Sofi’s are able to obtain a traditional loan with less down and no extra insurances.
- Adjustable Rate Mortgage – Available in 5 and 7-year terms with rates around 3.9 to 4.4%. ARM borrowers can also take advantage of a possible down payment of ten percent and no private mortgage insurance. With these loans, buyers can get a lower rate for a fixed period of time, but after that the interest rate will adjust each year over the life of the loan.
Adjustable rates mortgages are best for those who only want to live in their home for a short period of time. In most cases, home owners choose to refinance to a fixed rate mortgage before the loan adjustment period if they have decided to stay longer.
- Mortgage Refinance – Sofi also offers mortgage refinance and cash out options. Refinancing is a great option for people who want to lock in a lower interest rate so save money. Cash out options can be a great way to get cash for home renovations or college tuition. Often times refinancing interest rates are substantially lower than credit cards.
You can use our extensive set of calculators determine which of the loans are better for you, whether to get a 15 or 30-year loan, ARMs or fixed rate mortgage, whether to refinance, calculate your APR, whether to make extra payments and more.
Sofi Mortgage Process, Pros & Cons
How to Get a Loan
If you are ready to check out what Sofi has to offer check out their website. You will be able to view their products and rates at a glance. You are able to get a quick two minute prequalification with no commitment. You will be promoted to create an account before moving on. Provide your name, location, and create a password to gain access.
Sofi’s pre-qualification process does not affect your credit score. If you decide to get a loan through Sofi, you’re entire application process will be done online.You can apply and upload any documents you need virtually. Sofi will assign a team member to your loan to advise and walk you through the process.
Unlike some lenders with Sofi most loans average a 28 to 30 closing time frame.
What We Like
- Full Online Loan Process: Sofi is an only online lender. This is great for people who are looking for the convenience of online tools and processing. You will not have to drive around and meet with lenders or drop off paperwork. You can prequalify, apply, and process your loan completely online.
- Underwriting Process: Sofi has a unique underwriting process, which some lenders may consider risky. Borrowers that don’t have a lot of excess cash for down payments or large debt are welcome at Sofi. Even younger borrowers who are just starting out and may not have a lengthy credit history can get approved. These types of situations might be a red flag to some lenders, but Sofi makes it possible to obtain a home loan under these circumstances.
- No Fees: This is the real deal, no hidden fees lender. Sofi does not charge an application fee, origination fees, and does not require private mortgage insurance. This is a great incentive for buyers who are not looking to pay hundreds or thousands of extra dollars just to obtain a loan.
What We Miss
- Online Only Lender: For the same reason online lending is a pro, in some ways Sofi is limiting their pool of buyers. Some customers are not as computer and tech-savvy and may find this type of loan process difficult. Those who desire face to face assistant will find this type of lender unfit for their needs.
- Higher Rates: In comparing rates online, you will quickly notice Sofi definitely have higher rates. This may be due to the fact there are no fees to obtain a loan. If you are solely looking at Sofi for a low rate, you may want to keep comparing.
- Lacking in Loan Products: Sofi limits their potential buyers again by not offering government backed loans like so many other lenders do. If you are looking for an FHA or VA loan, you will not find those options here.
- Not a National Lender: Although you can obtain a loan in 42 states and Washington D.C., if you live in any of the states mentioned early, you are out of luck. Perhaps they will grow into all fifty states in coming years.
Should You Consider Sofi Mortgage?
Sofi is a newer company but is gaining popularity because of their flexible lending guidelines and online process. If you are seeking a process done solely online you should definitely check Sofi out. They have made it quick and efficient to financing to buy a home with their online forum and thirty-day closing window.
If you haven’t built up a credit history or carry high debt you may find it difficult to get approved by many lenders. Sofi welcomes these buyers and situations. Sofi also offers a very attractive no fee and low down payment approach. Bottom line is if you aren’t exactly a traditional type of buyer and are looking for the convenience of the online home loan process, Sofi should be at the top of your list.