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What Is A YOURgage® And How Does It Work?

April 04, 2023 4-minute read

Author: Sarah Sharkey

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A fixed-rate mortgage is a popular choice among home buyers. If you don’t want to stick with the traditional 15-year or 30-year term options, YOURgage might be the solution. Instead of a preset term length, you’ll have the flexibility to choose a loan term that works for you.

What Is A YOURgage Loan?

YOURgage from Rocket Mortgage® is a home loan option that gives you some flexibility when choosing your loan term. You won’t have to choose between the popular 15- or 30-year term options. With YOURgage, you can pick a loan term between 8 to 29 years.

Home buyers with specific financial goals will appreciate what YOURgage has to offer. With the ability to customize the term length of their loan, you’ll have greater control over your budget and payoff goals.

YOURgage Vs. A Traditional Mortgage

When shopping around for a traditional mortgage, you’ll notice that most come with predetermined term lengths. 15- and 30-year term lengths are some of the most common options. But for some homeowners, these traditional options are not ideal for their financial goals.

That’s when YOURgage might be the right fit. The major difference is that the term length of a YOURgage varies. The homeowner can pick a loan term between 8 to 29 years. With this flexibility, you can choose a mortgage that suits your budget and your long-term financial plans.

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How Does A YOURgage Work?

The process of obtaining a YOURgage is very similar to obtaining a traditional mortgage. But there are a few key differences. Here’s a closer look at the process.

  • Choose a loan term: You’ll have the chance to choose a loan term between 8 to 29 years.
  • Apply: Gather the necessary paperwork and fill out your mortgage application. You’ll need all the same information as a traditional mortgage, like your W-2, paystubs, tax returns.
  • Make a regular monthly payment: Once the loan is finalized, you’ll start making regular monthly payments. You will pay off the loan when the term is complete.

A YOURgage comes with a fixed interest rate. As a homeowner, you should expect consistent monthly payments on your principal and interest over the loan term.

When Is It A Good Idea To Get A YOURgage?

A YOURgage is a specialized mortgage product that makes sense for some homeowners. Here’s when it might be a good idea to get a YOURgage.

  • Greater flexibility: You don’t have to choose between 15- or 30-year terms. Instead, you can select a term length that works best for your goals.
  • Fixed interest rate: A YOURgage comes with a fixed interest rate. With that, you won’t have to worry about interest rates rising in the future because you are locked in.
  • Option to avoid private mortgage insurance (PMI) with a 20% down payment: If you don’t want to pay PMI, you can skip it by putting 20% down.
  • Pay less in interest: If you choose a shorter loan term, you’ll pay less in interest over the life of your loan. Depending on your choice of term length, you might save thousands in interest payments.

As a homeowner, control over your loan term can have a big impact on your financial picture. Instead of getting stuck with a mortgage term that is too long or too short, you can find the exact right term length for your situation.

You might have specific financial goals surrounding your mortgage. For example, you might want to pay off your home loan by a milestone birthday. With a YOURgage, you have the flexibility to build this goal directly into your monthly mortgage payments.

If you’re on the fence about a YOURgage, consider calculating your potential savings tied to a shorter loan term. It might be surprising, but you could save yourself thousands by opting for a shorter loan term.

For example, let’s say you take out a $200,000 home loan with a 30-year loan term and 6% interest rate. You’d have monthly payments of $1,199.10 and pay a total of $231,676.38 in interest over the loan term. But if you opt for a 25-year loan term, you’d have a $1,288.60 monthly payment and pay $186,580.85 in total interest. The shorter loan term would save you over $45,000 in interest payments.

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Do YOURgages Come With Special Requirements?

When applying for a YOURgage, you must meet specific requirements. Here’s a look at the minimum requirements to take out a YOURgage:

  • Credit score: You must have a minimum FICO® Score of 620. But a higher credit score might unlock lower interest rates.
  • Debt-to-income (DTI) ratio: Your DTI ratio cannot exceed 50%. You can calculate your DTI ratio by dividing your total monthly debt payments by your income.
  • Down payment: Buyers must make a down payment of at least 3%. However, you’ll need to put down at least 20% to avoid PMI.
  • Cover closing costs: You must pay between 3% to 6% of the purchase price in closing costs. Be prepared to cover this expense to finalize the loan.
  • Loan amount limits: For more of the United States, the loan amount cannot exceed $726,200. But in Alaska and Hawaii, that limit is increased to $1,089,300.

The requirements to get a YOURgage are similar to getting a traditional mortgage. You’ll need a relatively solid financial position to finalize your home purchase with any type of loan.

How To Apply For A YOURgage

If you’re ready to apply for a YOURgage, here’s a walkthrough of the process.

  • Head to Rocket Mortgage: The process starts by heading to Rocket Mortgage.
  • Fill out your application: You can fill out your mortgage application on Rocket Mortgage. Be prepared to provide information about the property and your financial situation.
  • Select a term length: You’ll have the flexibility to choose a term length that works for you. Take some time to run the numbers before nailing down your best option.

The Bottom Line On YOURgage Loans

YOURgage gives you much-appreciated flexibility in the home loan process. You can choose a loan term that is the perfect fit for your situation. If you are ready to begin the home buying process, start your application online.

Take the first step toward buying a house.

Get approved to see what you qualify for.

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Sarah Sharkey

Sarah Sharkey is a personal finance writer who enjoys diving into the details to help readers make savvy financial decisions. She’s covered mortgages, money management, insurance, budgeting, and more. She lives in Florida with her husband and dog. When she's not writing, she's outside exploring the coast. You can connect with her on LinkedIn.