Mr. Cooper Vs. Rocket Mortgage: Better Online Mortgage Lender

If you’re in the market for a mortgage, you’ve probably come across two of the biggest names in online mortgage lending: Mr. Cooper and Rocket Mortgage. But which one should you choose for your home loan?

In this comprehensive guide, we’ll compare the pros and cons of Mr. Cooper and Rocket Mortgage to help you make the best decision.

A Brief Comparison Table

FeatureMr. CooperRocket Mortgage
Interest RatesCompetitive ratesCompetitive rates
Origination Fees0-1% of loan amount1-1.5% of loan amount
Loan TypesConforming, government loans. VA/FHA specialtyConforming, jumbos, government loans
Minimum Credit Score600580
Down Payment Required5% on conforming loans3% on conforming loans
Loan ProcessSlower manual underwritingFaster tech-driven underwriting
Customer ServiceMixed reviews, but dedicated loan officersHighly rated but dispersed support
Closing TimeframeCan take longer with underwritingAs quick as 8 days
Best ForPersonal guidance, govt loansFast, seamless digital experience

Overview Of Mr. Cooper And Rocket Mortgage

First, let’s look at brief overviews of each lender:

Mr. Cooper
Mr. Cooper

Mr. Cooper

  • One of the largest mortgage servicers in the US
  • Offers conforming and government-backed mortgages
  • Online loan application and digital tools for managing your mortgage
  • Access to local mortgage experts if needed
  • Originated by Nationstar Mortgage Holdings Inc. in 2018

Rocket Mortgage

  • America’s largest mortgage lender
  • Offers a wide variety of mortgage products
  • Fully online mortgage process
  • Known for speed and simplicity through their online platform
  • Originated by Quicken Loans in 2015

Both lenders provide an easy way to apply for and manage a mortgage completely online. But they have some key differences when it comes to their specific loan offerings, technology, and customer service.

Also Read: Choose Between AmeriSave Mortgage And New American Funding.

Mortgage Rates And Fees

One of the most important factors when choosing a mortgage lender is the interest rate and fees they offer. Here’s how Mr. Cooper and Rocket Mortgage compare:

Interest rates

  • Rates are very similar between the two lenders
  • Both offer competitive rates for well-qualified borrowers
  • Slight fluctuations day to day, but overall on par with each other

Origination fees

  • Mr. Cooper has origination fees from 0% to 1% of the loan amount
  • Rocket Mortgage origination fees range from 1% to 1.5%
  • Can add thousands to your total closing costs

Closing costs

  • Average closing costs for both lenders fall between 2-5% of loan amount
  • Rocket Mortgage tends to have slightly higher fees
  • Mr. Cooper offers discounts for existing customers

Lender credits

  • Mr. Cooper provides lender credits more often
  • Can offset origination/closing costs
  • Rocket Mortgage credits less common

Rate locks

  • Both lenders offer free rate locks for 30-90 days
  • Locks your interest rate during home buying process

Overall, interest rates will be very similar between the two lenders. But Mr. Cooper tends to offer lower origination fees and more frequent lender credits, which can save you money on closing costs.

Loan Products And Qualifications

Mr. Cooper and Rocket Mortgage also differ when it comes to the types of mortgage loans they offer and borrower eligibility requirements:

Rocket Mortgage
Rocket Mortgage

Loan types

  • Both offer a full range of conforming and government loans
  • Including fixed & adjustable rate, FHA, VA, USDA
  • Rocket has more jumbo loan options for high-value homes
  • Mr. Cooper specializes in VA and FHA loans

Credit score requirements

  • Minimum scores are 580 for Rocket, 600 for Mr. Cooper
  • But both require good credit for best rates/approval odds
  • Guidelines loosened during pandemic but tightening again

Down payment requirements

  • Rocket requires 3% down for conforming loans
  • Mr. Cooper asks for 5% down on conforming
  • Lower down payments possible with government loans

Debt-to-income ratios

  • Maximum DTI of 50% for both lenders
  • Stricter income documentation for higher DTI ratios

First-time homebuyer programs

  • Rocket Mortgage has specific programs for first-timers
  • Down payment assistance and homebuyer education
  • Mr. Cooper less focused on first-time buyers

Rocket Mortgage offers more flexible qualification guidelines overall. But Mr. Cooper may be a better fit if you specifically want a government-backed loan like FHA or VA.

The Mortgage Process

Mr. Cooper and Rocket Mortgage also take slightly different approaches when it comes to the mortgage application and approval process:

Application process

  • Both have online applications that can be completed in minutes
  • Rocket touts an easier, faster application experience
  • Mr. Cooper may require more upfront documentation

Underwriting and approval

  • Rocket uses a proprietary tech platform for faster underwriting
  • Automated verification and decisioning based on your data
  • Mr. Cooper has more manual underwriting
  • May take a few days longer for approval

Ease of process for borrowers

  • Rocket Mortgage is known for client-friendly, low friction process
  • Goal is to make homebuying and financing easy
  • Mr. Cooper not quite as seamless but still decent online experience

Closing times

  • Rocket Mortgage clients can close in as little as 8 days
  • Average closer to 21 days for both lenders
  • Mr. Cooper closings may take longer with manual underwriting

The bottom line is Rocket Mortgage aims to provide lightning-fast approvals through technology automation. Mr. Cooper offers a smoother process than traditional lenders, though not quite as streamlined as Rocket.

Customer Support

What about when you need mortgage help or have questions? Here’s how Mr. Cooper and Rocket Mortgage stack up for customer service:

Communication channels

  • Both offer phone, email, mail, and online account support
  • Live chat available with Rocket Mortgage
  • Mr. Cooper has more local branches for in-person help

Customer service reputation

  • Rocket has higher ratings for timely, knowledgeable assistance
  • Complaints of long hold times with Mr. Cooper phone support
  • But wide range of experiences with both lenders

Loan officer access

  • Rocket provides an online loan team but no single point of contact
  • Mr. Cooper assigns a dedicated loan officer
  • Helpful for guidance throughout the process

Customer resources

  • Extensive FAQs and video libraries on both lenders’ sites
  • Rocket Mortgage also provides multiple mortgage calculators
  • Useful tools for comparison shopping

Having access to knowledgeable mortgage professionals can simplify the loan process. In this regard, Mr. Cooper’s direct loan officer access gives them an edge over Rocket’s dispersed support model. But Rocket makes up for it with faster and more positive customer service experiences overall.

Also Read: Choose Between AmeriSave And Rocket Mortgage.

Frequently Asked Questions (FAQ)

Is Rocket Mortgage part of Mr Cooper?

No, Rocket Mortgage and Mr. Cooper are completely separate mortgage lending companies and competitors within the industry. Rocket Mortgage was founded by Quicken Loans, while Mr. Cooper was originally Nationstar Mortgage.

Is Mr Cooper a good mortgage lender?

Mr. Cooper is generally considered one of the better mortgage lenders, known for competitive rates and a smoother online process than traditional banks. They specialize in VA, FHA, and government-backed loans. However, customer service reviews are mixed.

Who is Rocket Mortgage’s biggest competitor?

Mr. Cooper is viewed as one of Rocket Mortgage’s biggest competitors, along with loanDepot, Fairway Independent Mortgage, and Guaranteed Rate. These large online lenders all compete for mortgage market share.

What is the downside to Rocket Mortgage?

Some potential downsides of Rocket Mortgage include:
Slightly higher origination fees than competitors like Mr. Cooper
Lack of single point of contact – dispersed support model instead
Complaints of repetitive sales calls/contacts after initial inquiry
Not a great fit for more complex loans requiring specialized expertise
But their technogy, efficiency and service still attract many borrowers looking for a fast and streamlined mortgage process.

Also watch the video!

The Verdict

At the end of the day, here are a few key considerations as you choose between these two mortgage giants:

  • Rocket Mortgage is ideal if you want a super fast, easy home buying experience. Their focus on technology and service makes financing seamless.
  • Mr. Cooper is a better option if you need more guidance and hand-holding or specific government-backed loans. Their local teams and VA/FHA expertise brings more of a human touch.
  • Shop around and get quotes from both lenders. Small differences in rates or fees can make one more affordable.
  • Look at actual customer reviews to see real experiences with these lenders.
  • Think about the type of mortgage process you want. Do you value speed and tech-driven service or personalized attention more?

While Rocket Mortgage and Mr. Cooper take slightly different approaches, they both provide a modern, efficient home financing experience. Do your research to decide which lender’s strengths best fit your mortgage needs and preferences.

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