Today we’ll do a deep dive into SoFi, short for Social Finance, which offers mortgages, personal loans, student loan refinancing, and even a credit card.
Their overall goal is to “help people get their money right,” but we’ll focus on the mortgage part for the purposes of this review.
Chances are you’ve heard of the company, perhaps because SoFi Stadium is the home of both the LA Rams and LA Chargers.
Or maybe they refinanced your student loan at some point in the past. The San Francisco-based online bank is also making a bigger push into the home loan space.
So if you’re a prospective home buyer or existing owner, you may want to add them to your list of lenders to consider.
SoFi Mortgage Fast Facts
- Retail direct-to-consumer bank and mortgage lender
- Offers home purchase financing and mortgage refinancing
- Founded in 2011, headquartered in San Francisco, CA
- Licensed to do business in 49 states and the District of Columbia
- Funded roughly $3 billion in home loans during 2021
- Also offers student loan refinancing, personal loans, insurance, and banking services
- Publicly traded company (NASDAQ: SOFI)
- Offers an on-time closing guarantee and waived fees on refinances
- Do not currently offer FHA, VA or USDA home loans
Social Finance Inc., or SoFi for short, was founded in 2011 by a group of students from Stanford Graduate School of Business.
They initially offered student loans and later expanded into personal loans, mortgages, credit cards, checking and savings accounts, and also insurance.
One of the company’s founders, Mike Cagney, started his own company called Figure, which offers home equity lines of credit and crypto mortgages.
SoFi is based in San Francisco, CA and considers itself a digital bank. To that end, they do not have physical branches.
At the moment, they’re licensed to do business in every state other than Hawaii. However, only purchase loans are offered in the state of New York.
On April 3rd, 2023, the company announced the acquisition of “leading fintech mortgage lender” Wyndham Capital Mortgage.
This should further their reach in the mortgage space and make them a more significant player moving forward.
In 2021, SoFi funded roughly $3 billion in home loans, with nearly 90% of volume coming from refinance transactions.
How to Apply for a Mortgage with SoFi
To get started, you can head over to their website and check out their daily mortgage rates and/or tinker around with their online mortgage calculator.
If you like what you see, you can click on “Start application” to get the ball rolling. Or if you have additional questions, you can call them up directly.
SoFi prides itself on using the latest technology to make the process as paperless as possible. But they also have dedicated human mortgage loan officers that provide one-on-one help.
Their digital home loan application is powered by fintech company Blend.
It allows you to fill out the application electronically, link financial accounts for easy importing, and scan/upload documentation when needed.
Many documents such as loan disclosures can also be eSigned to help you save time along the way.
Once approved, you’ll be able to log in to your portal to check loan status, satisfy outstanding conditions, and get in touch with your loan officer.
All in all, they offer a good mix of technology and human customer service to help you get to the finish line.
Home Loan Programs Offered by SoFi
- Home purchase loans
- Refinance loans: rate and term and cash out
- Conforming loans backed by Fannie/Freddie
- Jumbo loans up to $3 million loan amounts
- 3% down payment options
- Fixed-rate mortgages: 10-, 15-, 20-, and 30-year loan terms
- Adjustable-rate mortgages: 5/6, 7/6 and 10/6 ARMs
SoFi offers home purchase loans and refinance loans, including cash out refinances.
They lend on single-family homes, condos, and 1-4 unit properties, including second homes and investment properties.
All of the loans they offer are conventional, meaning no FHA loans, VA loans, or USDA loans.
That may change in the future, but as of now you’re limited to a conforming loan backed by Fannie Mae or Freddie Mac for up to 97% loan-to-value (LTV).
Or a jumbo loan, with loan amounts up to $3 million and down payment as low as 10%.
SoFi offers fixed-rate mortgages with terms of 10, 15, 20, and 30 years available. And adjustable-rate mortgages, including 5/6, 7/6, and 10/6 ARMs.
Those who don’t want to lose their low rate on a first mortgage can take advantage of a home equity line of credit (HELOC).
SoFi offers HELOCs as large as $500,000 up to 95% CLTV.
SoFi Mortgage Rates
One nice thing about SoFi is that they publicize their mortgage rates online. This means no guessing how low they are.
You’ll see daily rates right on their mortgage homepage for the 30-year fixed, 20-year fixed, 15-year fixed, and 10-year fixed.
At last glance, they appeared to be pretty competitive relative to others banks and online lenders.
You can also put in your loan parameters (e.g. loan amount, property type, LTV) to get more personalized rates.
At the moment, they’re also offering a 0.25% purchase pricing special on 30-year conforming purchase transactions. Be sure to inquire for details.
SoFi also recently launched a “Lock and Look feature” that allows you to lock in your rate for up to 90 days before you find a property.
And if you submit a fully executed purchase contract within 30 days of that rate prelock, SoFi will reduce the rate locked by an additional 0.125% at no cost.
The one question mark is lender fees – they appear to charge an “administrative fee” which is akin to an application or loan origination fee. But it’s unclear how much.
Be sure to inquire about both rates and fees if/when you apply. And pay attention to the mortgage APR that incorporates both items.
SoFi Close On-Time Guarantee
Like some other mortgage lenders, SoFi offers an on-time guarantee.
This means if your loan doesn’t close on or before your closing date, and the delay is due to SoFi, they’ll provide you with $2,000.
It’s only available only for the purchase of a primary residence (owner-occupied). And the property must be a single-family residence (no condos).
The loan amount must be conforming and meet the guidelines of Fannie Mae.
Additionally, you need to be a W-2 borrower (no self-employed borrowers) and an executed purchase contract must be submitted at least 30 days prior to the closing date.
There are other terms, like locking the loan, paying for and scheduling the appraisal, and providing all required documentation within 24 hours of SoFi requesting it.
And uploading any follow-up documents within 36 hours of their request.
Basically, you need to do your part and have a straightforward loan scenario to qualify.
SoFi Will Waive Their Fee on Mortgage Refinance Applications
At the moment, SoFi is offering to waive its so-called administrative fee when you refinance your mortgage.
To be eligible, you must take out a SoFi mortgage for the purchase of a home and close by June 30th, 2023.
When you refinance, the “current market interest rate” must be at least 1% lower than the interest rate on your original loan.
And you must request that the administrative fee be waived at the time of application (and prior to locking your mortgage rate).
The offer is limited to one refinance transaction per person and it must take place by June 1st, 2024.
Whether mortgage rates fall by that amount remains to be seen…
As with all these types of deals, a waived fee might not mean much if a different mortgage company is offering a lower rate and/or less fees.
Still take the time to shop with other companies even if they’re offering to waive a fee.
SoFi Mortgage Reviews
Because SoFi offers the full spectrum of banking services, you’ll need to comb through reviews carefully.
Over at Zillow, they have a 4.67/5 rating from over 300 reviews. These should be all or mostly mortgage-related, so you may want to start here first.
On Trustpilot, SoFi has an “excellent” 4.6/5 rating from over 5,000 customer reviews. Take the time to read them to find mortgage-oriented reviews.
At ConsumerAffairs, they have a lesser 3.8/5 rating from about 2,600 reviews. And a 2.9/5 with WalletHub from around 800 reviews.
Again, you need to filter the mortgage reviews from the rest to get a clearer picture of customer service with regard to home loans.
While not Better Business Bureau (BBB) accredited, they do currently hold an ‘A+’ rating based on complaint history.
That being said, there were nearly 900 complaints on file over the past three years and their rating is a dismal 1.24/5 on the BBB website based on customer reviews.
Of course, many of the reviews might be related to other products offered by the company that have nothing to do with mortgages.
To sum things up, SoFi seems to offer the latest tech and some pricing incentives that could make them competitive relative to other options.
But their lack of a full lending menu may be a turn off for some. Those with a straightforward loan scenario could find them worth considering if the price is right.
SoFi Mortgage Pros and Cons
- Can apply for a mortgage online without a human
- Offer a digital mortgage application powered by Blend
- Mostly paperless process with dedicated loan officers
- Publicize their mortgage rates online
- Currently offering a 0.25% purchase pricing special
- A+ BBB rating
- Waive their admin fee when you refinance
- Free smartphone app
- Free mortgage calculators
The Maybe Not
- Do not offer FHA/VA/USDA loans
- No physical branch locations
- Don’t originate mortgages in Hawaii
- Only offer home purchase loans in New York
- Minimum 620 FICO required
- Hundreds of complaints on BBB website