Guaranteed Rate Mortgage Review: November 2024

Guaranteed Rate, now known as Rate, is a nationwide mortgage lender offering a range of loan products, including conventional and government-backed loans, refinances and home equity lines of credit (HELOCs). The lender also touts its same-day approval as key to a faster mortgage process, potentially allowing homebuyers to close in as little as 10 days. Find out the pros and cons of Rate, what to know before you apply and how it compares to other lenders. 

Best for: Loan selection 

Whether you’re looking for a conventional loan, a jumbo loan or a government-backed loan such as a FHA or VA loan, you can get it from Rate. 

If you’re already a homeowner, you can apply for a HELOC or cash- out refinance once you’ve built up enough equity. In short, it can be a one-stop shop for all of your mortgage needs.

Methodology 

To determine the best mortgage companies, Credible evaluated lenders based on several different categories: rates and fees, reputation, eligibility, efficiency, customer experience, and discounts and perks. We also looked at the types of loans offered by each lender for research purposes only, they did not factor into the overall score. We assigned a score out of five stars to each lender based on our findings. 

Learn more about our expert lender ratings by checking out our Mortgage Lender Rating Methodology.

Pros and cons 

While Rate’s home loans can benefit many borrowers, they’re not the best fit for everyone. Here’s what to consider:

Pros 

• Large selection of home loans: Rate’s loan options include 15- and 30-year fixed-rate mortgages, jumbo loans and VA and FHA loans. It also offers interest-only mortgages, a less-common financing option that homebuyers with nontraditional income can use to pay only interest at the beginning of the loan.
• Also offers HELOCs: With a HELOC, you can use your home’s equity as collateral to secure a line of credit with Rate. Depending on how much equity you have, you could borrow between $25,000 and $400,000. Plus, the time to fund is typically five to 10 days. For other lenders, it’s often between 45 to 60 days.
• Fast pre-approval: Rate has a fast pre-approval timeline. Once you submit your online application, Rate immediately reviews your information and will tell you whether you’re approved the same day. 
• Fast close: Some homebuyers may be able to close in as few as 10 days with Rate.
• Low-down-payment loans: The Rate OneDown program offers low-down-payment options to qualified borrowers. Eligible first-time buyers can make a 1% down payment, and may qualify for an additional 2% or up to $2,000 toward the down payment. Rate also offers up to $1,000 toward lender fees. 

Cons 

• Short draw period on HELOCs: Many lenders offer a draw period on HELOCs up to 10 years. Rate, however, only allows for a draw period between two and five years. 
• Prepayment fee: Rate charges a prepayment fee, but it does not disclose how much in its fee schedule. Instead, it’s located in the borrower’s loan documents. If you know you’re going to pay off your loan in full before it matures, consider speaking with a loan officer before you choose Rate to find out how much the fee will be.
• Loan origination not fully disclosed online: Rate discusses loan origination fees on its blog, but doesn’t address the costs clearly on its main website. It states that, on average, buyers should expect to pay between 0.5% and 1.0%, but it's unclear if this is Rate’s full range for origination fees.

What to consider before applying 

Before you apply for a mortgage with Rate, you may want to consider the lender’s reviews, rates and fees.

While Rate’s mortgage interest rates are low, this doesn’t mean it’s the best offer you can find. When you take out a mortgage, it’s a good idea to shop around and compare multiple lenders. 

Here’s what Rate charges for some common fees:

• Late fee: If you make your mortgage payment after the due date, Rate charges up to 6% of the payment amount. 
• Insufficient funds fee: Should your bank or credit union report to Rate that there aren’t enough funds in your account to cover the payment, Rate may charge up to $50.
• Certified check fee: If you choose to make your mortgage payment with a certified check, Rate may charge you a $5 fee. 
• Title search and report fee: Rate charges up to $2,000 for a title search. 

Rate has a Better Business Bureau (BBB) customer score of 3.92 out of 5 stars, and has an A+ rating from the company. While BBB has logged over 70 customer complaints, Rate does appear to take the time to reply to and resolve negative customer experiences. The lender has a lower customer review score on Trustpilot, with an average score of 2 stars out of 5. 

How to apply for a loan with Rate 

The steps to getting a home loan from Rate are pretty straightforward:

• Check your credit score and credit reports: Before you apply for a loan, it’s a good idea to review your credit score and credit reports. Most importantly, look for errors. If you spot any, begin the dispute process as soon as possible to have them removed.
• Review Rate’s loan options and fee structures: While Rate has a wide array of loan options, it may not have what you're specifically looking for. While you’re reviewing Rate, also take a look at the fee schedule to make sure it compares well with other lenders you’re considering.
• Apply for pre-approval: Rate is able to expedite the pre-approval process and can make it happen within a single day. During this stage, you’ll need to submit pre-approval documents online or through the mobile app. This will include providing a government-issued ID, proof of income and any other documents Rate may request. 
• Find a house: Once you’re pre-approved, you’ll know how much you can offer for a house. If you’re working with a real estate agent, they can help you find homes in your budget. 
• Make a bid: Submit a bid through your real estate agent and begin the negotiation process. If your offer is accepted, you and the seller will sign a purchase agreement. 
• Wait on underwriting: The underwriter will review the home you bid on and conduct a more thorough review of your finances. If you and the home are approved by Rate, a closing date will be set.
• Review and sign the loan agreement: Rate will provide a detailed document that outlines the terms and conditions of your loan. Review it carefully and ask questions.
• Close: At closing, you’ll have a few more documents to sign, and you’ll need to provide the down payment and pay any closing costs you’re responsible for. Once you do, the home is yours. Monthly mortgage payments will begin shortly thereafter.

How to qualify for a loan with Rate

To qualify for a loan with Rate, buyers will need a secure income, a credit score of 620 or higher and a low debt-to-income ratio (DTI). While lenders will look at a borrower’s entire credit profile, Rate generally allows a maximum DTI of 43%. When you calculate your DTI, keep in mind that many lenders want a mortgage payment to remain at or below 28% of the borrower's gross monthly income. However, there may be some wiggle room if you have few other debts. A loan officer with Rate will review your financial situation and approve you for a specific loan amount.

How to refinance with Rate

A refinance can be a good idea if you can get a better rate or loan term. You may even want to consider a refinance with the same lender you initially borrowed from. 

To refinance with Rate, you’ll go through the following steps:

• Submit an application with Rate: When you apply, you’ll need to provide documents including your current income, debts, assets and proof of insurance. Rate will review your documents and use that information to determine if you are eligible for a refinance.
• Get an appraisal on your home: Rate will send an appraiser to your home to determine its current value and loan-to-value ratio. 
• Review terms and conditions of new loan: Depending on your home’s appraised value, Rate will offer you a refinance mortgage with a new interest rate and maturity date.
• Close: Just as when you buy a home, you’ll have to sign new documents and pay closing costs. Once you do, you’ll have a new mortgage on your home. Your new mortgage payment should begin shortly after closing. 

How Rate compares 

Guaranteed Rate, recently rebranded to simply Rate, has a variety of loan options backed by a speedy process. The lender can provide pre-approval decisions as quickly as the same day, and complete some closings in as few as 10 days. Keep in mind that not all homebuyers will have a straightforward buying process that will ensure a fast experience. Before you decide to apply, see how Rate compares to other lenders: