Rocket rolls out home equity loans for debt consolidation
A new product to pay off high-interest credit card debt will be offered to millions of users of Rocket’s personal finance app, Truebill.
Rocket Companies has a new product to market to millions of users of its personal finance app, Truebill – home equity loans.
Rocket touts subsidiary Rocket Mortgage’s new home equity loan as ‘one more way to pay off debt that has risen with inflation’ as Federal Reserve interest rate hikes drive up cost of balance of a credit card. Although mortgage rates are also up, topping 6% in June, credit card issuers often charge double-digit interest rates.
According to the latest Federal Reserve data, credit card and other revolving debt fell from $973 billion in the first quarter of 2021 to $1.11 trillion in May. Thanks in part to astronomical house price appreciation, Americans have about 10 times more workable equity in their homes – about $11 trillion or $207,000 per owner, according to real estate data aggregator Black. Knight.
Fed data shows that credit card users who carried a balance in their account paid an average interest rate of 16.65% in May, compared to 15.9% in the first quarter of 2021. Even personal loans are often a better deal with rates on 24-month loans averaging 8.73% in May, according to the Fed.
Now, Rocket can offer consumers who want to consolidate high-interest debt at lower rates the option of taking out a home equity loan or a personal loan.
Rocket subsidiary Rocket Loans offers personal loans from $2,000 to $45,000, while Rocket Mortgage’s new home equity loan allows homeowners to take out fixed rate loans from $45,000 to $350,000 over 10 or 20 years.
“Our goal is to consistently create financial products that help our clients achieve their goals,” Rocket Mortgage CEO Bob Walters said in a statement. “In today’s market, short-term interest rates have risen sharply, making it much more difficult to pay off credit card debt. With our new home equity loan, customers can improve their lives by getting a payment they can more comfortably afford.”
Both products will be offered to users of Rocket’s personal finance app, Truebill, which Rocket acquired in December for $1.27 billion. Truebill, which will change its name to Rocket Money in August, had 3.4 million users as of March 31, and Rocket hopes to attract even more consumers to the app by offering free premium accounts to 2.6 million Rocket customers. Mortgage.
The nation’s largest home loan provider, Rocket Mortgage closed $351 billion in mortgage volume across all 50 states in 2021 from loan origination centers in Detroit, Cleveland and Phoenix.
But as rising interest rates crippled its mortgage business, Rocket repositioned itself as a fintech platform, with a stable of related businesses.
In addition to Rocket Mortgage, Rocket Loans, and Truebill, companies under the Rocket umbrella include:
- Rocket Central: A centralized hub for fintech platform Rocket Cos. providing technology, accounting, legal services, public relations and human resources. It is formerly known as Rock Central.
- Rocket Homes: A real estate brokerage and search portal that allows consumers to search multiple listing service data for homes, connect with a real estate professional, and get mortgage approvals through Rocket Mortgage.
- ForSaleByOwner.com: an online marketplace for consumers to buy or sell properties on their own, offering financing through Rocket Mortgage.
- Amrock: National provider of title insurance, real estate appraisals and settlement services and “Preferred Provider” to Rocket Mortgage.
- Amrock Title Insurance Co.: A national title insurer, providing underwriting services for the national title insurance agent, Amrock.
- Rocket Auto: a virtual market where consumers can buy cars offered by a network of dealerships.
- LowerMyBills.com: An online comparison service for mortgages, credit cards, insurance, loans, home services and personal finance.
- Core Digital Media: A digital, social and display advertiser generating leads for mortgage, insurance and education providers.
- Nexys Technologies: Software solutions to streamline, digitize and automate mortgage processes.
- Rock Connections: a sales and support platform providing contact center services including appointment booking, customer pre-qualification, lead and effectiveness consulting, lead generation, reporting and analysis.
- Rocket Innovation Studio: Recruits and mentors technology talent to meet the needs of Rocket companies.
- Woodward Capital Management: An issuer of private label mortgage-backed securities, providing funding for loans issued by Rocket Mortgage.
- Lendesk: A Canadian mortgage technology provider of products to digitize and simplify lending.
- Edison Financial: A Canadian digital mortgage company that uses Lendesk’s Spotlight as its lender submission platform. Edison Financial will rebrand Rocket Mortgage later this month.
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Email Matt Carter