SoFi Mortgage Overview
SoFi was founded in 2011 and is headquartered in San Francisco, California. The financial startup has raised $2.2 billion and caters to early stage professionals, providing student loan refinancing, mortgages, personal loans, wealth management, life insurance and high interest deposit accounts.
The internet-based company does not operate any brick-and-mortar locations. All customer interaction is accomplished online or by phone.
|30 year fixed||4.04%||4.00%||+0.03|
|15 year fixed||3.46%||3.48%||-0.02|
|30 yr fixed mtg refi||4.06%||4.00%||+0.05|
|15 yr fixed mtg refi||3.55%||3.52%||+0.02|
|7/1 ARM refi||5.76%||5.44%||+0.32|
|15 yr jumbo fixed mtg refi||3.66%||3.58%||+0.08|
National Mortgage Rates
Regions Served by SoFi
Does SoFi Operate in My Area?
SoFi is licensed to issue mortgage loans and refinances in Alabama, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Maryland, Michigan, Minnesota, Montana, New Hampshire, Nevada, New Jersey, North Carolina, North Dakota, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Wisconsin, Wyoming and Washington, D.C.
What Kind of Mortgage Can I Get With SoFi?
Fixed-rate mortgage: SoFi offers 15-year and 30-year fixed-rate mortgages. This type of loan has the same interest rate over the life of the term. That means your monthly principal and interest payments stay the same. Most homebuyers opt for 30-year fixed-rate mortgages as it combines low monthly payments with a stable interest rate.
Adjustable-rate mortgage (ARM): You can generally find a lower interest rate with an ARM. But that interest rate won’t stay the same. SoFi offers 5/1 and 7/1 ARMs. With this loan, your interest rate is fixed for the first five or seven years of your mortgage. After that, your rate will adjust up or down once per year until the end of your term. Buyers who flip homes or plan to move and sell the home within the fixed-rate term often opt for ARM loans. SoFi requires 10% down for 7/1 ARMs and 25% down for 5/1 ARMs. If you choose a SoFi 5/1 ARM, you’ll pay interest only for the first 10 years and pay back the principal for the remaining 20 years.
Jumbo loan: The conventional conforming loan limit is $484,350, a number set by Fannie Mae and Freddie Mac, two mortgage corporations tied with the U.S. government. Home purchases over that number (or $726,525 in areas with high-priced real estate) require a jumbo loan. SoFi offers jumbo loans up to $3 million to borrowers with 10% down with no private mortgage insurance (PMI).
Refinance: If you have at least 10% equity in your home, you can apply for a refinance with SoFi. Keep in mind the company doesn’t offer FHA or VA loans, so you won’t be able to refinance those loans unless you’re switching to a conventional mortgage. Refinancing only makes sense if you qualify for a lower rate or more favorable terms. However, you’ll have to pay closing costs on the loan again.
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What Can You Do Online With SoFi?
As you would expect with an online-based startup, SoFi has a robust digital experience. You can prequalify and get preapproved online, and you can complete the entire application process online from your home computer. In addition to applications, SoFi offers online homebuyer education with an 18-page PDF that covers topics ranging from how to budget for a mortgage to what to expect during the closing process.
For visual learners, there are a few brief videos that help you get a sense of SoFi as a mortgage lender. You can also find current rates for the offered loan terms.
There’s a detailed frequently-asked-questions section as well. The only thing missing, really, is an online chat system where you can ask questions in real time without calling. That said, the company does have a mobile app and also boasts customer service hours that cover 4 a.m. to 9 p.m.
Would You Qualify for a Mortgage From SoFi?
Because SoFi only offers standard mortgage loans, the general standards will be higher than what you’ll find from a lender who offers VA, FHA or other government-backed loan options. For a conventional loan, SoFi requires a 660 credit score or better. On the other hand, jumbo loans at SoFi call for a 720 credit score or better.
SoFi will closely consider your debt-to-income ratio (DTI), an important financial health marker. Again, these requirements differ depending on the type of mortgage you're applying for. As of the time of this writing, the maximum debt-to-income ratio SoFi allows on conventional loans is 50%, whereas jumbo loans are more stringent at 43%.
Down payment savings is the next qualification consideration. SoFi offers jumbo and conventional mortgages for as little as 10% down. Most lenders require 20% down unless you’re getting a government-backed mortgage, such as a VA, FHA or USDA loan, which SoFi doesn't have. While SoFi conventional loans still come with PMI if you put less than 20% down, jumbo loan applicants can avoid PMI if they put at least 10% towards a down payment.
While you may not need as much in savings with SoFi as you would with another lender, you will need to have enough cash saved up to cover closing costs, homeowners insurance and the first few months of your mortgage, at the very least.
What’s the Process for Getting a Mortgage With SoFi?
SoFi advertises that you can start by getting your rates in two minutes with a “painless prequalification.” You sign up for an online login and proceed to the prequalification application. You’ll need to provide your personal contact information, citizenship status, current homeownership status, employment and income information and property details. In addition, you’ll need to specify details such as the property type and location as well as whether the loan is for a new property, refinance or cash out.
To get your rate, SoFi will run a soft credit pull. After you see if you qualify for a loan, and what rates you could get if you do, you can move forward to preapproval if you wish. Preapproval takes more time and is more in-depth than a prequalification. You’ll need documents such as your W-2, tax returns, pay stubs, bank account statements, assets and retirement documentation and any additional paperwork requested by SoFi mortgage representatives.
After preapproval, SoFi allows you to request a 45-day rate lock. Before you can do that, however, you need to show a signed purchase contract. That means you can lock a rate only after your offer on a home is accepted.
If you proceed with the home loan, SoFi will process and underwrite it. The last step is closing. That’s when you’ll sign final documents with your real estate agent and lawyer and get the keys to your new home.
How SoFi Stacks Up
While SoFi is a startup, it’s well-funded and relatively transparent. You can find fees, rates and all the information you need online without having to call a representative or fill out a form, something many competitors require. Plus, if you're a SoFi member, you'll get a 50% discount on your origination fees from $1,000 to $500.
That said, if you want to compare your government loan options, SoFi isn’t for you. The company doesn’t offer FHA, VA, USDA loans or any type of down payment assistance programs or other loan options for underserved homebuyers. The company’s target market is young professionals working in technology. That’s a population that generally doesn’t opt for government-backed options, so it’s clear who SoFi wants as a customer.
If you’re looking for a lender that offers a wide array of options as well as online access, you might need to look elsewhere. Rocket Loans (Quicken’s online-only mortgage arm) is online-only with specialized government options like VA and FHA loans. Big bank lenders such as Chase or Bank of America allow you to choose whether you want to work with your loan officer online or in-person while offering a larger variety of loan types.