- Renters could get up to $5,000 to help pay their closing costs when they buy a home with Rocket Mortgage.
- Eligible borrowers can get a lender credit equal to 10% of their last 12 months of rent payments.
- This credit is available on all of Rocket Mortgage's loans, but only for primary residences.
Buying a house isn't for the faint of heart — or the light of wallet. Depending on the details of your purchase, you may need tens of thousands of dollars in cash to complete the transaction. Many renters simply don't have the savings to make it happen.
Fortunately, more and more lenders are working to meet homebuyers where they're at, providing assistance to make homeownership possible. On Tuesday, Rocket Mortgage, the largest mortgage lender in the U.S., launched a new program that gives renters up to $5,000 in assistance to help them buy a home.
A lender credit based on rent payments
"There are a lot of costs that are involved in buying a home, and sometimes people aren't aware that not only do you need to bring in a down payment, there's also closing costs that are involved," says Eileen Tu, vice president of product development and credit policy at Rocket Mortgage.
Prospective homebuyers may already be familiar with the down payment, which can amount to between 0% and 20% of the purchase price, depending on the type of mortgage you get. But the amount you'll spend on closing costs, which are the costs associated with originating and closing on the loan, can come as a shock. Closing costs are often between 2% and 5% of the loan amount.
Rocket Mortgage's new program, called RocketRentRewards, gives renters a lender credit for a portion of their rent payments over the last year. This credit is used to lower your closing costs.
How RocketRentRewards works
Renters who get their mortgage from Rocket Mortgage can receive a credit equal to 10% of their last 12 months of rent payments. That means if you paid $2,000 a month in rent, you could get $2,400 off your closing costs.
Tu says this credit can be used on all of the loans Rocket Mortgage offers, including conventional, FHA, and VA loans. It just can't be combined with other assistance programs from Rocket, such as the ONE+ mortgage. ONE+ allows borrowers to get into a home with just a 1% down payment.
Are you eligible for RocketRentRewards?
The main requirement to qualify for RocketRentRewards is, naturally, that you have to be a renter. But you don't need to have been living in the same place over the last 12 months.
To calculate your credit, Rocket Mortgage will ask for documentation proving that you rent and how much you pay each month.
RocketRentRewards can only be used for the purchase of a primary residence, not a second home or investment property. You don't need to be a first-time homebuyer to qualify.
Keep in mind that you may still owe closing costs after the credit is applied. You'll also be responsible for your down payment. The minimum down payment on a conventional loan is 3%. For FHA loans, it's 3.5%. VA loans don't require a down payment.
$95 (waived for Rocket Mortgage serviced clients)
20.99% - 30.99% Variable
N/A
- Up to 5% back on all purchases up to $160,000
- $200 intro bonus
- Waived $95 annual fee for those with a mortgage through Rocket
- Rewards redemption options are limited
- You must have a mortgage through Rocket to unlock the best value for your points
- Earn up to 5% cash back in mortgage savings on every tap or swipe – using the first card designed with home in mind.
- No need to stress about spending categories. Get rewarded for every dollar spent.
- Take back control of your financial life with the only credit card powered by a personal finance app.
- Whether you’re paying off your mortgage or planning to buy a new home with Rocket Mortgage, redeem your rewards to reach your homeownership goals sooner.
- See if you’re preapproved in as little as 2 minutes with no impact to your credit score.
- Enjoy Visa Signature benefits for everyday protection.
How to get assistance when buying a home
Rocket Mortgage isn't the only lender that offers closing cost or down payment assistance. If you want to buy a home but aren't sure you have the funds to do so, do some research to see what's available to you.
"I think a lot of people don't know that these types of offers are out there," Tu says.
The best mortgage lenders for first-time buyers all have programs that can make homeownership more accessible. Bank of America, for example, offers a down payment grant of up to $10,000 and a lender credit of up to $7,500 for eligible borrowers. And Third Federal Savings and Loan offers Low Cost Mortgages, which come with only $395 in closing costs in exchange for a slightly higher mortgage rate.
Your state's housing finance agency may also offer an affordable type of mortgage called an HFA loan. These mortgages typically come with lower mortgage rates, down payment grants or loans, and other benefits.
