Credit Karma Home Loans Review

Credit Karma is one of my favorite tools for keeping tabs on credit scores, and filing taxes for free.

However, Credit Karma isn’t just a free credit monitoring tool. It’s also an online marketplace for loans. Lenders pay Credit Karma to compete for business from its users. 

While Credit Karma has had a strong credit card marketplace for years, it’s starting to strengthen other marketplaces as well. If you’re in the market for a mortgage, Credit Karma Home Loans could be a good place to start your mortgage search.

Credit Karma is not a mortgage lender. Instead, it’s an online marketplace for loans. Lenders that pay to be on the platform provide basic information about average mortgage rates, fees, and more. 

These are not pre-qualified offers. Instead, these show averages based on user-provided inputs. To get a quote, users will need to complete a full application.

Example table comparing rates between lenders

To start the application process, users can select one (or more) lenders and request a quote. Credit Karma will provide additional information about the lender and allow the user to fill out a short informational application.

Upon submitting the short application, the user will receive a phone call or an email from the lender. The lender will then explain the remainder of the application process to the potential borrower.

Related: Best Online Mortgage Lenders

Credit Karma itself does not offer any home loans, but it partners with lenders that do. Its advertising partners offer conventional mortgages, FHA home loans, USDA mortgages, and VA loans. 

These loans are available for both purchase and refinances. It does not currently advertise jumbo mortgages. Credit Karma also has one home equity line of credit (HELOC) partner which advertises a low-fee HELOC.

The Credit Karma Home Loans marketplace is fairly strong even though it’s relatively new. Even though all the lenders pay for an advertising position, Credit Karma researches each partner before bringing them onto the site. Before you start an application (and provide personal information to a lender), you’ll know what to expect from the lender.

Users will also appreciate that Credit Karma allows users to control their own experience. Users apply to one lender at a time. They won’t be inundated with dozens of phone calls from every lender in the nation.

I was also impressed by the large number of customer reviews hosted on the Credit Karma website. Some lenders had hundreds or even thousands of reviews. Credit Karma doesn’t “cherry-pick” reviews either. It prominently displays both a positive (5-Star) review and a negative (1-2 Star Review).

In general, Credit Karma does a nice job of limiting information to just the most relevant points. Users can quickly decide which lender fits their needs and move on to the application process.

However, a site that limits information inherently has some drawbacks. Users won’t have the opportunity to learn about the dozens of mortgage options not listed on the site. Most of the time, that won’t matter. But people looking to rehab a house, buy a multi-family property, or purchase a high-priced home may not find what they need on Credit Karma.

This approach can also cause trouble for people with poor credit or limited credit history. People with great credit often struggle to narrow their search to just one lender. By contrast, those with poor credit struggle to get the attention of any lender. Even lenders that offer FHA loans, may not offer loans to borrowers with poor credit. These borrowers may have several false starts through Credit Karma.

Additionally, Credit Karma has just one HELOC partner as of writing. Unless you visit other marketplaces, that’s not enough information to know whether that partner has a good product.

Buying and refinancing a home is a tough process. It can be especially overwhelming if it’s your first time taking out a mortgage. I think it’s valuable that Credit Karma Home Loans puts the power in the user’s hands. 

You get to decide how many mortgage lenders you consider. Whether you request one quote, three, or even more is totally your choice. Credit Karma also keeps the information as simple as possible and I think that’s valuable. For most people, there’s no reason to be overwhelmed by choice.

However, if you need a specialty home loan (like a HELOC, home equity loan, jumbo mortgage, bridge loan, or rehab loan), Credit Karma may not have enough for you. If you’re looking for those kinds of mortgages, an alternative marketplace like LendingTree could be a better option.