State Farm Mortgage Review
State Farm issued its first auto loan in 1922 in Bloomington, Illinois. Now, almost 100 years later with a headquarters in the same city, State Farm is America’s largest property and casualty insurance provider. Consumers may know State Farm for its catchy jingles on TV, but it also deals with everything from auto insurance and banking to credit cards and home insurance. If you’re shopping for a home mortgage, be aware that State Farm has partnered with Rocket Mortgage by Quicken Loans to offer refinancing and new mortgages.
State Farm and Rocket Mortgage at a glance
|Lender||APR||Interest rate||Term length|
|Rocket Mortgage by Quicken Loans||2.75%–3.75%||3.402%–4.798%||10-, 15- and 30-year fixed-rate loans|
*Rates are reflective of Rocket Mortgage by Quicken Loans’ product offerings due to the mortgage partnership between Rocket Mortgage and State Farm.
What we like about it
Because of the size of State Farm, it can offer you multiple advantages — and home loans are no exception. If you’re interested in a conventional loan with an adjustable-rate mortgage (ARM) or fixed-rate, VA or jumbo loans (to name a few), then State Farm’s partnership with Quicken Loans will most likely have what you need.
In addition, State Farm ratings are generally positive, and with over 19,000 agents across the U.S., State Farm lets you work with someone who understands your community and where you’re interested in moving. You’ll also have access to help from State Farm’s customer service team throughout your mortgage process. Recently, State Farm has partnered with Rocket Mortgage® by Quicken Loans to improve the loan offerings and the overall application process.
Things to consider
The pre-qualification process for State Farm home loans cannot be started online; you need to work with a local agent to begin the mortgage process. If you’re a potential borrower and haven’t started the process, you may find it difficult to locate the current State Farm mortgage rates.
While most hopeful homeowners across the nation have access to State Farm mortgages, be aware that State Farm does not service Ohio and Washington D.C.. Lastly, partnering with Quicken Loans may be a positive for some consumers, but you may not be interested in using a third-party company or service.
What you need to know
State Farm offers a wide array of home loan products. Its home mortgages include conforming and non-conforming. Within these loan categories, State Farm’s partnership with Quicken offers FHA loans, VA, ARMs and fixed-rate options. Having this many choices is important for potential homebuyers, as it helps to compare the many rates and terms, and how each can impact finances.
How to apply
To apply directly for a State Farm mortgage through Quicken Loans, contact a State Farm agent who offers State Farm banking products and is mortgage licensed. Since you can’t start the pre-qualification process online, you will have to begin the process with an agent or calling a customer service agent who will put you in touch with a mortgage consultant.
You will need to have the following information ready as you begin the mortgage application:
- Two years of employment history (include the name, address and dates of employment).
- Most recent pay stub.
- Previous two years of tax returns.
- Last two bank statements and other paperwork verifying your assets.
- Copy of the contract if you’re purchasing a new home.
Collateral and criteria
State Farm doesn’t make the mortgage qualification information readily available, but there are general guidelines when it comes to qualifying for a home loan. Each loan product (for instance, a VA or FHA loan) will have its own down payment and credit score requirements. Some loans offer a no-down-payment option, while others may require a 20% down payment to avoid private mortgage insurance.
Either way, State Farm will look closely at your credit scores, and your likelihood of approval is influenced greatly by your score. It’s important to discuss the options and requirements with your mortgage consultant so you understand the impact on your finances.
State Farm vs. SoFi
While State Farm requires customers to contact an agent directly to start the application process, SoFi offers the process completely online. In addition to the ease-of-use and digital accessibility, SoFi gives customers member perks and fewer closing costs on the lender side. If you want to join a club of not only homeowners but also score tickets to events, receive career advice or financial coaching, SoFi is the right choice for you. Its home loan products include 10- to 30-year mortgages as well as mortgage refinancing.
State Farm vs. Bank of America
Like State Farm, Bank of America is another well-known lender. Bank of America is able to offer almost every type of loan, which makes it easy to compare loan products. There are also multiple down-payment assistance programs within Bank of America to help throughout the mortgage process. Bank of America doesn’t disclose its requirements and fees for borrowers but does offer multiple tools, such as mortgage calculators and closing cost estimators, to provide information during the homebuying journey.
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[Editor’s note: Because State Farm does not originate its own mortgages, it has been excluded from our mortgage SimpleScore methodology.]
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