Ready to dive into the mortgage game? Wells Fargo and Rocket Mortgage (formerly Quicken Loans) are probably on your radar. Let’s break down the hype and see who truly turns up the heat!
Performance face-off
Wells Fargo: Wells Fargo, a huge name in banking with classic in-person service. But Wells Fargo’s been in hot water with a major trust meltdown, including a $250 million fine in 2021. Their BBB. (Better Business Bureau) rating? An F.
Rocket Mortgage: Rocket’s the flashy star of the mortgage world, splashing billions on sales and marketing to dominate the “online lender” scene. It’s been around since the 80s as Quicken Loans, so while they seem very digital and try to hype their AI to investors, the bulk of the business still relies on TV ads and call centers. They may have a snazzy reputation, but don’t get dazzled—higher rates and sneaky fees are the norm.
In 2023, Rocket Mortgage was a powerhouse, churning out 289,000 loans worth $76.26 billion. They were the second-largest mortgage lender in the U.S., with a colossal focus on refinancing—39% of their loans were for that purpose, even as rates soared in 2023. This is 10% higher than Wells Fargo’s refinance rates which were 29% of their loans.
It begs the question: were their salespeople just tricking people? Or were their rates shockingly high to begin with? We’re a bit stumped…
Tomo Mortgage: Founded in 2020 by two former Zillow execs, we’re the new kid on the block, shaking up the home buying game. We use tech to automate a lot of the home buying process, and because we cut all these costs we are able to charge low rates, zero lending fees, and actually close on time.
The breakdown
| Lender | Wells Fargo | Rocket Mortgage | Tomo Mortgage |
| Founded | 1929 | 1985 | 2020 |
| Lender Fees | $2,376 per loan* | $4,700 per loan* | $0 |
| Average Loan Size | $626,000 | $264,00 | $376,000 |
| On-Time Close Rate | Not reported | Not reported | 98% |
| Customer Reviews | 3.0 stars on Consumer Affairs | 3.8 stars on Consumer Affairs | 5.0 stars on Consumer Affairs 4.95 stars on Zillow |
| Employee Reviews | 3.6 stars on Glassdoor | 3.5 stars on Glassdoor | 4.1 stars on Glassdoor |
How to judge mortgage lenders
- Interest rates: Don’t get fooled by flashy numbers. Always compare the “par rate” with 0 points and check out the APR (Annual Percentage Rate). This is your real cost of borrowing, so get the full picture before signing up.
- Lender fees: Also called “origination fees” or “application and processing fees,” Wells Fargo and Rocket Mortgage like to charge big fees—Wells Fargo around $2,376 and Rocket Mortgage about $4,700. With us, you get zero lender fees. That’s a potential $2,000 to 4,000 in your pocket!
- On-time close rate: This is how often lenders actually close on the promised date. Industry standard? About 40%. But Tomo Mortgage? We’re flexing a 98% on-time close rate. Other lenders don’t even bother to share this info, but it’s a huge deal.
- Pre approvals: While some lenders don’t take the time necessary to prepare a strong pre approval and offer letter, this is critical to making a successful offer on a new home. Tomo Mortgage’s online pre approval only takes 15 minutes, and it includes a soft credit check—but way more reliable when you’re making an offer on a home.
- Customer satisfaction: If you’re finding it tough to trust what lenders are telling you, one of the best ways to gauge their reliability is by looking at reviews from people who were once in your shoes. Did those customers have a smooth experience with the lender? What went right—or wrong?
- Employee reviews: Employee reviews may not appear to have a direct impact on your loan offering, however, comparing how employees at each company rate working there, can give you an inside look into the company morals, reliability, transparency, and more.
So, which one wins?
So, who takes the crown? If you’re all about in-person service, Wells Fargo might tempt you. But don’t confuse face time with top-notch service. Rocket Mortgage has better reviews than Wells Fargo, but both are outshined by Tomo in customer satisfaction.
When it comes to fees, Wells Fargo and Rocket Mortgage both hit you with over $2,000 in charges, while we stand out with $0 lender fees.
For most people the most important factor is the rate. We were curious to see how Tomo Mortgage’s APR (annual percentage rate) stacked up against Rocket Mortgage, so we looked at three Zip codes for two weeks on Nerdwallet (where we could compare apples-to-apples on loan scenarios). Using the median home sale price for each location, a credit score range of fair at 680, and with putting 5% down.
In this scenario, from August 7 to August 20, 2024, Rocket’s average APR was 7.64%, while Tomo Mortgage’s average APR was 6.26%.
So, we’re obviously biased, but we’d say don’t choose either. Tomo Mortgage has lower rates, lower fees, and better reviews. It’s a pretty obvious choice.
*sources: Business Insider Mortgage Reviews: Wells Fargo, Rocket Mortgage, and HMDA data from 2023
If you’re ready to start your journey to homeownership, get pre approved with Tomo Mortgage today.