In a bid to help more renters make the leap to homeownership, Rocket Mortgage has launched a new program called “RocketRentRewards.”
As the name suggests, you can now earn rewards simply for paying your rent each month.
Specifically, renters get 10% of their rent for the past 12 months as a credit toward closing costs.
For example, if you currently pay $2,000 per month, you’ll get $2,400 for a year’s worth of rent.
This amount can then be applied to closing costs on your mortgage to reduce your out-of-pocket expenses.
How RocketRentRewards Works
In order to take part in this new program from Rocket Mortgage, you simply need to be a renter who applies for a home loan with Rocket.
Once you apply, Rocket will look at your rent payments from the past 12 months that can be verified with documentation (another important reason to not pay cash!)
After confirming your current rental amount, they will multiple that amount by 12 and then give you 10% of that total.
For example, they cite a national average rent of $1,800 per month, which translates to $21,600 annually.
If we take 10% of that amount, it’d be $2,160, which could then be applied toward your mortgage closing costs.
There is a limit of $5,000 offered via this program, meaning the credit caps out at a monthly rent of about $4,200.
But the rent could theoretically come from multiple properties if you happened to move in the past year because they consider all rental payments over the last 12 months.
Typical closing costs include things like the loan origination fee, underwriting and processing fees, title insurance, home appraisal, and so on.
These amounts can add up in a hurry, and when combined with a down payment, can prove to be a major barrier to homeownership.
In the release, Rocket noted that “renter households have grown rapidly” since 2020, now accounting for over a third of homes in the United States.
And nearly half of renters are people of color, about twice the rate of homeowners, according to a Joint Center for Housing Studies of Harvard University report.
The company believes RocketRentRewards can help bridge the gap, especially in underserved communities, which will represent more than half of first-time home buyers by the year 2030, per a recent Fannie Mae study.
Good Deal or Not? It Depends…
This is a nice new perk for those looking to make the move from renting to owning, but as always, we need to determine if it’s a deal or not.
To determine this, you’ll need to compare all the components of a mortgage offer, including the mortgage interest rate, closing costs, and any applicable credits.
In this case, you could earn up to $5,000 in closing cost credits, but you’ll need to look at the net closing costs.
For example, if closing costs are $10,000, you’d only pay $5,000 with the maximum renter credit.
Then you’d need to look at the mortgage rate, which we all know, the lower the better.
Mortgage companies can provide lender credits that reduce your out-of-pocket closing costs in exchange for a higher mortgage rate.
But if their rate is still lower, even with those costs absorbed, they’d be the better deal.
So it’s important to look at the deal holistically to determine who is actually offering the best price.
This can be achieved more easily by looking at the mortgage APR, though make sure all fees are accounted for.
And as always, take the time to gather multiple mortgage rate quotes, since studies prove more quotes equal more savings.
Tip: You can earn points on rent with Bilt Mastercard and redeem the points at a value of 1.5 cents per point for a mortgage down payment!
Can This Be Used with Other Rocket Programs?
Another consideration is if RocketRentRewards can be used alongside other programs offered by Rocket.
For example, there’s the Rocket Rewards Loyalty Program, which allows users to complete certain activities for closing cost credits.
And Rocket’s BUY+ that offers a credit of up to $10,000 when you use a Rocket Homes Partner Real Estate Agent to find a home.
Not to mention the Rocket Visa Signature Card, which allows cardholders to earn 5% back toward a down payment on a home purchase.
I also wonder if this can be used in conjunction with Rocket Mortgage ONE+, which is their 1% down mortgage that uses a 2% grant to get to a 3% down payment, the minimum required for a conforming loan backed by Fannie Mae.
Assuming you can combine some or all of these offers, Rocket might be hard to beat. But as noted, other banks and lenders offer similar perks, credits, and grants as well.
So put in the time to shop around as you would any other purchase. And even more time since it’s a home purchase!
Read on: How to reduce closing costs on your mortgage.
Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 19 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.
