SoFi offers first-time homebuyers low down payments (3%), competitive rates, and a seamless online application process. With FHA, VA, and conventional loans, it caters to diverse needs but lacks USDA loans. A $10,000 closing guarantee and 90-day rate locks add value, though customer service issues and limited loan variety may be drawbacks. Ideal for tech-savvy borrowers seeking flexibility.
Navigating Your First Home Purchase with SoFi
SoFi, a San Francisco-based online lender, has become a popular choice for first-time homebuyers due to its competitive offerings and digital-first approach. Founded in 2011, SoFi expanded into mortgages in 2014 and has since funded over $7.5 billion in home loans. Its acquisition of Wyndham Capital Mortgage in 2023 bolstered its fintech-driven mortgage services, making it a significant player in the market.
For first-time homebuyers, SoFi’s standout feature is its low down payment options. Qualified first-time buyers—defined as those who haven’t owned a home in the past three years—can secure a conventional loan with as little as 3% down. For FHA loans, the minimum down payment is 3.5%, while VA loans, available to eligible veterans and military members, require no down payment. However, conventional loans for non-first-time buyers require at least 5% down, and jumbo loans demand 10%. If the down payment is less than 20% on a conventional loan, private mortgage insurance (PMI) is required, adding to monthly costs.
SoFi’s mortgage rates are notably competitive. According to 2023 Home Mortgage Disclosure Act data, SoFi’s rates for home purchase loans averaged 0.13% to 0.23% below the national average between 2019 and 2021. In 2023, its rates were approximately 0.26% above the average prime offer rate (APOR), still positioning SoFi as a cost-effective option. Borrowers can view daily updated rates on SoFi’s website and use its mortgage rate calculator to get personalized estimates based on loan amount, credit score, and property details. A 90-day rate lock, longer than the typical 30–60 days offered by competitors, provides flexibility, with a free float-down option if market rates drop significantly.
The application process is entirely online, leveraging technology from fintech partner Blend for a paperless experience. Borrowers can prequalify with a soft credit check, which doesn’t impact credit scores, and move to preapproval within minutes. Required documentation includes Social Security numbers, photo ID, pay stubs, tax returns, and bank statements. SoFi’s digital platform also offers homebuyer education resources, including PDFs and videos, to guide first-timers through budgeting and closing processes. However, the lack of physical branches may be a drawback for those preferring in-person support.
SoFi’s loan portfolio includes conventional, FHA, VA, and jumbo loans, with fixed-rate terms of 10, 15, 20, or 30 years and adjustable-rate mortgages (ARMs) like 5/1 and 7/1 options. Notably, it does not offer USDA loans, limiting options for buyers in rural areas. Its HomeReady and Home Possible programs, backed by Fannie Mae and Freddie Mac, cater to low- to moderate-income buyers with 3% down payments and reduced PMI costs, requiring a minimum credit score of 620 and a debt-to-income (DTI) ratio of 50% or less. For FHA and VA loans, SoFi accepts credit scores as low as 600, lower than many competitors like Rocket Mortgage, which requires 620 for conventional loans. The average credit score for approved SoFi borrowers is 750, indicating that the best rates are reserved for those with strong credit.
A key perk is SoFi’s $10,000 close-on-time guarantee, offering a credit toward closing costs if delays are attributable to SoFi and specific conditions are met, such as timely document submission and a locked rate. Existing SoFi customers with personal loans, student loans, or investment accounts may qualify for a $500 discount on the $1,495 origination fee. However, total closing costs, including third-party fees like appraisals and title insurance, averaged $6,097 in 2023, which is competitive but not the lowest.
Customer feedback is mixed. SoFi holds an A+ rating from the Better Business Bureau and a 4.5-star rating on Trustpilot based on over 8,600 reviews. However, some borrowers report challenges with customer service, including inconsistent communication and delays in document processing. On platforms like Reddit, experiences vary, with some users praising competitive rates and others criticizing slow processes or unresponsive staff.
Compared to competitors, SoFi excels in flexibility and digital convenience. Rocket Mortgage offers a 1% down program (ONE+), outpacing SoFi’s 3% minimum, but SoFi’s lower credit score threshold for FHA and VA loans gives it an edge for borrowers with less-than-perfect credit. Better Mortgage matches SoFi’s 3% down option and digital process but offers fewer incentives. SoFi’s partnership with HomeStory can yield up to $9,500 in closing cost rebates, surpassing Better’s $2,000 rebate.
For first-time homebuyers, SoFi’s low down payments, competitive rates, and robust online tools make it a strong contender. However, its limited loan variety and potential customer service hiccups may prompt some to explore alternatives like Rocket Mortgage or local lenders for more personalized support or specialized programs.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Consult a qualified financial advisor before making mortgage decisions. Information is sourced from publicly available data, including Home Mortgage Disclosure Act records, company websites, and consumer reviews. Individual results may vary, and rates or terms are subject to change.
