Zillow Home Loans: A Comprehensive Review
Overview
Zillow Home Loans combines a lender marketplace with its own lending services, making it an ideal platform for homeowners seeking multiple mortgage options in one place. Zillow's status as a real estate industry giant has enabled it to establish itself as a rapidly growing mortgage lender.
Key Benefits
* "BuyAbility" Tool: Assesses home affordability in real time based on income, down payment, mortgage rates, and credit score, displaying homes within purchasing power.
* Convenient Shopping Experience: Integrate home browsing with loan shopping for a seamless experience.
Drawbacks
* Limited Loan Offerings: Zillow Home Loans has a narrower selection of loan products compared to other lenders.
* Unclear Prequalification Process: It's unclear whether prequalification/preapproval applications will come from Zillow Home Loans directly or from third-party providers within the Zillow Group Marketplace.
Loan Products
Zillow Home Loans offers a range of home loan products, including:
* Conventional loans
* FHA loans
* VA loans
* Purchase mortgages
* Refinance loans
* Cash-out refinances
* Fixed-rate mortgages
* Adjustable-rate home loans
* Jumbo loans
* Second home loans
* Investment property loans
* Buydown loans
Mortgage Rates
Zillow Home Loans' mortgage rates are displayed on its website, along with the one-week change for each rate. Conforming loan rates are available for 30-, 20-, 15-, and 10-year fixed-rate loans. ARMs are available in 3-, 5-, and 7-year terms. Government loans offer 30-year and 15-year fixed terms for FHA and VA mortgages. Jumbo loans have five options in fixed and adjustable rates.
Yahoo Finance Scoring
Based on 2023 Home Mortgage Disclosure Act (HMDA) data, Yahoo Finance gives Zillow Home Loans a score of 2 out of 5 for mortgage rates and 3 out of 5 for total loan costs. This indicates that Zillow Home Loans offered a higher-than-median mortgage rate but a near-median total loan cost to borrowers in 2023.
Mortgage Application Process
Zillow Home Loans offers multiple options for initiating a mortgage loan prequalification application. However, the process can be confusing due to different screens and sales channels.
Mortgage Calculators and Home-Buyer Tools
Zillow Home Loans provides several mortgage calculators, including:
* Mortgage calculator
* VA mortgage calculator
* Refinance calculator
* Affordability calculator
* Debt-to-income calculator
* Amortization calculator
Pros and Cons
Pros:
* Excellent learning resources, including a down payment assistance program finder.
* Mortgage rates include recent trends.
Cons:
* Interest rates may be slightly higher compared to other lenders.
* Loan options may seem more plentiful than they actually are due to partnerships with the lender marketplace.
* Zillow Home Loans is not authorized to issue home loans in New York.
Comparison to Other Mortgage Lenders
Zillow Home Loans vs. Rocket Mortgage
* Both offer a wide range of mortgage products.
* Rocket Mortgage has lower interest rates, while Zillow Home Loans has lower loan costs.
* Zillow Home Loans provides better online learning resources.
Zillow Home Loans vs. Better Mortgage
* Neither offers down payment assistance.
* Better has a wider range of home loans, including home equity loans and HELOCs.
* Zillow Home Loans' combination of loans and homes may provide a competitive advantage.
FAQs
* Credit Score Requirement: 620 is the minimum required for most loan types.
* Preapproval Time: Zillow Home Loans partners with external lenders, so preapproval timelines may vary.
* Hard Credit Check: Yes, there is a hard pull of your credit for preapproval.
* Safety of Prequalification: Zillow Home Loans claims to use bank-level security encryption and does not resell information.
Methodology
Yahoo Finance's scoring system for mortgage lenders is based on five primary categories: interest rates, affordability, loan costs, rate transparency, and online features. Regulatory actions within the past five years may also impact a lender's score.