SoFi mortgage review: Low-down-payment options for first-time and repeat homebuyers

SoFi initially launched with student loan options and has since expanded its offerings to include conventional mortgages as well as a variety of other lending and banking products. This could make this lender an ideal option if you’re looking for a one-stop shop to cover a wide range of financial needs. 

If you’re considering a mortgage from SoFi, here’s what you should know.

SoFi

Blueprint Rating

Interest rates

Below national average

DTI ratio

36% or lower (up to 50% for some programs)

More details

• Interest rates: Below the national average.
• DTI ratio: Up to 50%.
• Perks: On-time closing guarantee, 90-day rate lock and low-down-payment options.
• Preapproval time: Does not disclose.
• Time to close: Does not disclose.

SoFi overview

SoFi is an online banking company, founded by Stanford business school students in 2011. While the company originally started with student loan options, it now offers a wide range of financial products, including both purchase and refinance mortgage loans, personal loans, insurance, credit cards, auto loans and more.

The lender has received an A+ rating from the Better Business Bureau (BBB). As of Dec. 11, 2023, the company has a customer review rating of 1.74 out of 5.0 stars on the BBB. However, many of these reviews are about the company’s non-mortgage products. On Trustpilot, SoFi has a rating of 4.7 out of 5.0 stars based on more than 7,400 reviews as of Dec. 11, 2023.

How to qualify for a SoFi mortgage

While the exact qualifications for a SoFi mortgage can vary depending on the type of loan you apply for, here are some general guidelines:

• Credit score: You could qualify for a loan backed by the Federal Housing Administration (FHA) or Department of Veterans Affairs (VA) through SoFi with a score as low as 600. SoFi doesn’t disclose its credit score requirements for its conventional mortgages. 
• DTI ratio: In some circumstances, a debt-to-income (DTI) ratio of up to 50% is allowable, but a DTI of 36% or below will put you in the best position to qualify.
• Down payment: SoFi offers loans for first-time homebuyers that only require a 3% down payment. For those who have bought homes previously, SoFi requires just 5% down.
• Documentation: You’ll need paperwork that shows your income, tax returns, bank statements, any assets and other financial information.

Note that SoFi mortgage products aren’t available in Hawaii, and only its purchase loans are available in New York.

How to apply for a SoFi mortgage

1. Compare lenders and get pre-qualified. Before applying, be sure to shop around and compare your options with not only SoFi but as many mortgage lenders as possible. This can help you find a loan that works best for your needs. Consider factors like interest rates, repayment terms and eligibility criteria. Many lenders — including SoFi — allow you to get pre-qualifed with only a soft credit check that won’t affect your credit. This will give you an idea of how much you could qualify for if you apply. 
2. Pick a loan option and submit an application. After you’ve done your research, choose the lender you like best and apply. If you opt to submit a formal application with SoFi, you can speak with a mortgage loan officer to guide you through the process. Be prepared to provide requested documentation, such as proof of income, assets, identification and previous tax statements.
3. Close on the loan. If you’re approved, SoFi will guide you through the closing process. In addition to signing paperwork, be prepared to pay closing costs. Afterward, you’ll receive the key to your new home.

Pros of a SoFi mortgage

• $2,000 on-time closing guarantee.
• Can lock in your rate for 90 days.
• 3% down payment option for first-time homebuyers.

Cons of a SoFi mortgage

• Doesn’t offer loans backed by the U.S. Department of Agriculture (USDA).
• Higher credit score requirements for FHA loans.
• Not available in all states.

SoFi perks and special features

Savings and discounts

As of Dec. 11, 2023, borrowers can take advantage of a 0.25% pricing special on 30-year repayment terms. To be eligible, you must lock in your interest rate on a SoFi mortgage.

Additionally, if you purchase a house with this lender by June 30, 2024, the administrative fees will be waived if you also refinance through SoFi by Dec. 31, 2024. To qualify, the current market interest rate must be at least 1% lower than the rate on your original loan, and you must request the waiver at the time of refinancing.

On-time closing guarantee

Buying a home, especially in a competitive market, can be stressful. Once you finally get your offer accepted, the rest of the process has to occur in sequence for closing to happen on time. That means the appraisal, home inspection, title search and final mortgage approval must all go off without a hitch to get to the closing table on time. This can be a nail-biter, especially if you’re pressured to move out of your current house. 

To give you some peace of mind, SoFi offers an on-time closing guarantee. If your closing is delayed due to the lender, the company will pay you $2,000. To qualify, the following stipulations must be met: 

• You have proof of income with W-2s.
• SoFi approved your loan and locked your rate.
• A purchase contract on an eligible property was submitted at least 30 days before the closing date on the contract.
• You provided SoFi with all documentation within 24 hours of it being requested.
• You paid for and scheduled an appraisal within 48 hours of being contacted by an appraiser.

Lock in your rate for 90 days

With interest rates fluctuating, it’s helpful to be able to lock your rate should rates dip. SoFi offers the option to lock it in for 90 days. Conversely, most lenders only offer rate locks for 30 to 60 days. Locking in a low rate could save you thousands on your mortgage if rates go up.

If you sign a purchase contract within 30 days of locking your rate, SoFi will reduce your rate by 0.125% at no cost. If interest rates drop by more than 0.75%, you could qualify for a rate reduction. Once you hit the 60-day mark, you’ll be charged a $250 fee to extend the rate lock to 90 days. This fee is then refunded at closing.

First-time homebuyers can qualify with 3% down

SoFi provides first-time homebuyer loans, which are conventional mortgages with down payments as low as 3%. The lender also offers loans with as little as 5% down for all other borrowers. 

Keep in mind that, regardless of whether you’re a first-time homebuyer or not, you’ll typically have to pay private mortgage insurance (PMI) on a conventional loan if your down payment is less than 20%.

How SoFi could improve

Offer USDA loans

While SoFi offers government-backed FHA and VA loans, it doesn’t provide USDA loans. If you’re looking for a USDA loan, you’ll need to consider other lenders.

Accept lower credit scores for FHA loans

The credit score requirements for an FHA loan can be as low as 500 with a down payment of 10% or 580 with a down payment of 3.5%. However, exact qualifications can vary by lender. With SoFi, you’ll need a score of at least 600 to get approved for an FHA loan.   

Expand availability to all 50 states

SoFi mortgages aren’t available in Hawaii. You also can’t refinance with SoFi in New York, though purchase loans are permitted. 

SoFi customer service and reviews

SoFi offers multiple ways of contact for mortgages, including by phone, email or live chat. Its home loans support team is available Monday through Friday 6:00 a.m. to 6:00 p.m. Pacific Time (PT). 

As of Dec. 11, 2023, customers have given SoFi a 4.7 out of 5.0 stars on Trustpilot, with over 7,400 reviews. Several reviews note the positive and seamless experience of getting funding through SoFi. 

On the other hand, SoFi has a BBB rating of just 1.74 out of 5 stars with 273 reviews. Most complaints center around customers not receiving bonuses for opening accounts or referring people. Other reviews are about being denied on their loan application, and some report that the company is slow in making deposited funds available for checking account users.

SoFi alternatives: SoFi vs. Rocket Mortgage vs. Better

Chances are that if you’ve heard of SoFi, you’ve probably heard of Rocket Mortgage and Better. Rocket Mortgage is a big name in the online mortgage space, but its similarities to SoFi stop there. Formerly known as Quicken Loans, Rocket Mortgage has been writing mortgages since 1985. It offers conventional, jumbo, VA and FHA loans. The company also provides discounts on closing costs as well as loan options for those with credit scores as low as 580.

Better was founded in 2014 and launched its mortgage business in 2016. Where Rocket Mortgage has the experience, Better is the newcomer to mortgages. Better offers both fixed-rate loans and adjustable-rate mortgages (ARMs). While Rocket Mortgage requires a hard credit check for preapproval, Better’s application process takes about three minutes and is a soft credit check that won’t impact your credit score. 

Where SoFi outpaces Rocket Mortgage and Better is how deeply it incorporates all of your finances. With SoFi, which officially became a national bank in 2022, you can have your checking, savings, investments and loans (including a mortgage) all in one place. Where Rocket and Better offer some similar integrations, these aren’t near the level of SoFi.

	SOFI	ROCKET MORTGAGE	BETTER
Min. credit score	600 (depending on loan type)	580	500
Max DTI ratio	36% or lower (up to 50% for some programs)	45%	50%
Time to close	Does not disclose	30 to 45 days	3 to 6 weeks
Best for	One-stop-shop finances	Lower closing costs	Quick and easy preapproval process

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