SoFi (short for Social Finance) is a leader in the world of tech-based mortgages. They specialize in lending products such as private student loans, student loan refinancing, and mortgages. SoFi generally works with high-income borrowers that have non-traditional forms of credit. In particular, they provide unique opportunities and benefits for mortgage customers.
Whether you prefer the stability of a traditional fixed-rate mortgage or the flexibility of an adjustable-rate loan, SoFi offers an array of mortgage options to suit your needs.
This SoFi Mortgage review provides a detailed overview of the various types of home loans available, the eligibility criteria, and the attractive perks that come with selecting SoFi as your mortgage lender.
SoFi Mortgage Application Requirements
SoFi’s mortgage application process varies. They have stringent credit score requirements in certain areas, while being lenient in others. For example, to qualify for conventional loans or adjustable-rate mortgages, a minimum credit score of 660 is necessary, while for jumbo loans, the threshold is set at 720.
As a lender for high-income borrowers, SoFi mandates a down payment of at least 10% and a minimum loan amount of $100,000. However, SoFi displays flexibility in debt-to-income ratios, enabling borrowers with significant student loan debt to apply for a mortgage online.
While SoFi offers a great option for eligible borrowers, their services are not available everywhere, as they are only licensed to originate mortgages in specific states, including:
- New Jersey
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- Washington, D.C.
Different Mortgage Types Offered by SoFi
SoFi doesn’t offer any government loans. That means you can’t apply for government-backed mortgages such as VA loans, FHA loans, or USDA loans through SoFi.
However, they do offer a wide variety of different loan types. Here are the different types of mortgages you can apply for through SoFi.
30-year Fixed-Rate Mortgage
This is a standard mortgage product offered by most mortgage lenders. The advantage of this mortgage is that since your interest rate is fixed, your payments will remain stable over the life of the loan. This will almost be the most affordable plan for most borrowers.
The minimum down payment required is 10% and there’s no private mortgage insurance (PMI) required. Moreover, you can check out up-to-date mortgage rates on their website. It’s a popular option that offers stability along with spread-out payments.
20-Year Fixed-Rate Mortgage
Like the standard 30-year mortgage, a 20-year mortgage is set at a fixed rate. That means your payments won’t change over the life of the loan. It’s a suitable option for borrowers who want to pay their mortgage off a little sooner and save money on interest, but aren’t ready to commit to a 15-year mortgage.
15-year Fixed-Rate Mortgage
By opting for a 15-year mortgage, the monthly payment amount remains constant, owing to the unchanging interest rate. The key benefit, however, is that you can save a considerable amount on interest payments if you can cope with the higher monthly payments.
This is primarily because 15-year mortgages usually attract lower interest rates, and the repayment period is shorter, resulting in a reduced accumulation of interest.
Naturally, since the loan must be repaid over a shorter period, monthly payments for a 15-year mortgage are higher compared to a 30-year mortgage. Nevertheless, if you can manage the increased payments, it’s worth assessing your options to determine how much you can save in interest.
10-Year Fixed-Rate Mortgage
For borrowers committed to repaying their mortgage quickly, SoFi provides a 10-year fixed-rate mortgage that offers the best interest rates and maximum savings.
Although the higher monthly payments might not be feasible for everyone, this type of mortgage presents an excellent alternative for high-income borrowers determined to attain homeownership.
The 7/1 ARM is the only straightforward adjustable-rate mortgage SoFi offers. Like the other loans, the minimum down payment is also 10%.
If you’re not familiar with adjustable-rate mortgages, the way it works is for the first seven years, you’ll enjoy a fixed interest rate. After that, the rate adjusts on an annual basis for the rest of the 30-year loan.
The biggest benefit with this type of mortgage loan is that interest on a 7/1 ARM starts off much lower than with a fixed rate. If you intend to move from your house or refinance within seven years, it could be a smart choice to save money in the near term.
However, this could put you in a difficult position financially if things suddenly change, and you’re stuck with the mortgage once the rate changes.
SoFi also offers refinancing loans for people interested in reducing their mortgage’s interest rate. These loans come with competitive interest rates and no concealed fees.
Moreover, borrowers can apply for a cash-out refinance to leverage the equity in their homes to pay off high-interest debt or undertake home improvements. SoFi also provides the option for borrowers to use their home’s equity to settle their existing student loan debts.
Home Equity Loans
SoFi has teamed with home equity specialists Spring EQ to offer low fixed rates on home equity loans with various terms available. With a home equity loan from SoFi, you can get the funds in as few as two weeks with as few as four documents needed.
Understanding SoFi’s Competitive Fee and Rate Structure
One of the standout features of SoFi’s mortgage offerings is their approach to fees and insurance requirements. Unlike many lenders, SoFi distinguishes itself by not requiring private mortgage insurance (PMI) for its loans. This can lead to significant cost savings for borrowers over the life of the loan.
Additionally, SoFi simplifies the financial burden for borrowers by waiving origination and application fees, provided that the borrower’s down payment meets or exceeds the 10% minimum threshold. This policy further reduces the upfront costs typically associated with securing a mortgage.
In terms of mortgage rates, SoFi maintains a competitive edge by offering rates that are not only market-competitive but also transparently accessible. Prospective borrowers can conveniently find these rates published on SoFi’s website.
An added advantage is the ability to obtain a personalized quote at the early stages of the mortgage process. This feature allows potential borrowers to gauge their financial commitment before diving into the formal application process, ensuring a more informed and comfortable decision-making experience.
How to Apply for a Mortgage with SoFi
To start the mortgage process with SoFi, you must obtain prequalification. After setting up your account and providing some personal information, you’ll receive a customized interest rate in roughly two minutes. The prequalification procedure will not have any impact on your credit score.
Apart from your financial details, you’ll be required to inform the lender about the loan amount and expected down payment. You’ll then be able to explore the loan choices and conditions that are available to you.
If you’re satisfied with the rate that SoFi offers, you can proceed with the process and acquire preapproval for the mortgage. Following that, you’ll move ahead with the application procedure.
The application process will be completely digital, and SoFi employs a nontraditional underwriting approach. However, if you require advice or have any questions, you can always speak with a loan officer.
In addition to looking at your FICO score, SoFi also considers other less tangible factors, such as:
- Professional history
- Earning potential
- Payment history
Another unique feature of the SoFi mortgage process is that you only have to submit your information once. Using that data, SoFi can underwrite your loan to strengthen your offer on a home.
This is especially important in competitive markets where bidding wars are common. According to SoFi, most mortgages close within 28 days.
Exclusive Benefits and Extras with SoFi Home Loans
SoFi goes beyond traditional lending by offering unique value-added services to its home loan borrowers. Recognizing the importance of professional growth, SoFi extends career counseling services, which can be invaluable for borrowers looking to advance or pivot in their careers. This support underscores SoFi’s commitment to the holistic well-being of its clients, not just their financial health.
In addition to career support, SoFi fosters community engagement by providing access to various events. These range from relaxed local gatherings and happy hours to more formal networking opportunities. Such events are designed not only for enjoyment but also to facilitate meaningful connections, aiding borrowers in expanding their professional and personal networks.
Another practical tool offered by SoFi is their comprehensive mortgage calculator. This user-friendly resource empowers potential and current borrowers to make informed financial decisions. By inputting various interest rates and down payment scenarios, users can easily explore and estimate their potential mortgage savings. This transparency in planning helps simplify the home-buying process, making it more accessible and less daunting for SoFi clients.
SoFi Mortgage Reviews
SoFi Mortgage reviews are generally positive, with many borrowers praising the company’s competitive interest rates, user-friendly digital application process, and helpful customer service. Borrowers also appreciate the flexibility of SoFi’s underwriting process, which takes into account factors beyond traditional credit scores.
However, some reviewers note that the strict credit score requirements for certain loan types can be a challenge, and that SoFi is not available in all states. Overall, SoFi is a suitable option for borrowers with high incomes who want a wide variety of mortgage options and are comfortable with a fully digital process.
SoFi currently has a Better Business Bureau (BBB) rating of A, which is an indicator of great customer service. They also have very few complaints. You can find more SoFi Mortgage reviews at other review sites as well.
SoFi stands out as a flexible lending solution, particularly for individuals demonstrating strong earning potential and career growth prospects. This approach is especially beneficial for those with limited cash for down payments.
Moreover, SoFi caters to those with high debt-to-income ratios, often due to student loans, offering them viable mortgage options. To assess if SoFi aligns with your financial needs for a home purchase, consider reaching out for a personalized evaluation.