There's a reason so many consumers are drawn to using credit cards. When you use the same card repeatedly for different transactions, you can rack up reward points that can be redeemed for a host of perks, from gift cards to actual cash you can stick in your bank account and use to pay bills.
Well, now one mortgage company is trying something similar. And it could end up being a nice source of savings for you.
A new kind of loyalty program
Rocket Companies, a Detroit-based FinTech platform consisting of Rocket Mortgage and Rocket Homes, recently released details of its new loyalty program. Its purpose is to allow consumers and borrowers to rack up points that can be redeemed toward future transactions across the Rocket platform.
For example, those who accumulate points under this loyalty program can apply them to closing costs when financing a mortgage through Rocket. Closing costs are a huge expense associated with signing a mortgage, as they commonly amount to 2% to 5% of the home loan being taken out. So being able to save on those costs is important, especially at a time when mortgage rates have gotten so high and home prices are in a similar place (and don't seem to be coming down).
Home buyers commonly have to write a check for their closing costs when they finalize their mortgages. And while many mortgage lenders do allow buyers to roll their closing costs into their mortgages, that can lead to higher payments, making them harder to manage. So all told, lowering your closing costs is a good thing.
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More: Our picks for best FHA mortgage lenders
Will this new loyalty program save you money?
It could -- if you end up signing a mortgage or doing another financial transaction through Rocket that costs money. Think about this new loyalty program as a store credit card of sorts. You might get cash back you can use -- but only at that same store.
Well, the same thing applies here. You can rack up loyalty points in different ways, but they'll only be worth something if you have reason to use them on the Rocket platform.
Still, Rocket seems to want to make it easy for consumers to accumulate these points. For example, creating a free Rocket account could lead to earning some points, as could reading educational articles or watching educational videos in the Rocket Mortgage Learning Center. In fact, it's possible to rack up points simply by trying out Rocket's mortgage calculator.
Plus, Rocket Companies plans to expand its program in the coming months so consumers have new ways to accumulate points and redeem them. So all told, this new loyalty program could end up being a source of savings for home buyers who sign a mortgage with Rocket.
If you don't end up using Rocket for any financial products, then you may find that it's a bust. But it still never hurts to educate yourself on the mortgage and home buying process, so it does pay to look around Rocket's Learning Center -- even if all you get out of it is a knowledge boost.
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