If you are currently in the market to buy a house, you are likely suffering from a very specific modern addiction: Zillow scrolling.

You check it when you wake up. You check it on your lunch break. You check it while watching Netflix. You know the inventory in your zip code better than the local mailman does. You have alerts set up for "3 Bed, 2 Bath" homes that ping your phone at 2:00 AM.

So, when you finally find that perfect bungalow and a bright blue button pops up saying "Get Prequalified," it is incredibly tempting to just click it.

Why complicate things? You found the house on Zillow. You found your agent on Zillow. Why not get the money from Zillow too? It feels like the "Easy Button" for home buying.

But financing a home is different than browsing for one. A mortgage is likely the largest debt you will ever take on. Choosing the wrong lender can mean higher interest rates, missed closing dates, or thousands of dollars in unnecessary fees over the life of your loan.

So, is Zillow Home Loans actually a top-tier lender? Or is it just a convenient button in a popular app?

Here is our comprehensive review for 2025. We will break down their fees, analyze their aggressive "1% Down" program, and compare them directly against industry giants like Rocket Mortgage and Chase to help you decide who deserves your business.

What is Zillow Home Loans?

Zillow didn't start as a bank. For over a decade, they were simply a media company—a marketplace where other lenders paid millions of dollars to advertise their rates.

But in 2018, Zillow decided they wanted a bigger piece of the pie. They acquired a Kansas-based lender called "Mortgage Lenders of America" and rebranded it as Zillow Home Loans.

Their goal wasn't just to issue loans; it was to create a "Super App." They want to be the "Amazon of Real Estate," where you find, tour, finance, and buy a home all in one seamless digital ecosystem.

The "Zillow 360" Incentive

To get you to stay in their walled garden, Zillow uses a strategy called Zillow 360. This is a bundling discount.

  • The Deal: If you use a "Zillow Premier Agent" (a real estate agent who pays Zillow for leads) AND you finance your purchase with Zillow Home Loans, they offer incentives.
  • The Perk: This typically comes in the form of Lender Credits at closing—often ranging from $1,500 to $2,500.
  • The Math: These credits are real money. They can be used to pay for your appraisal, title fees, or recording fees. If you are cash-strapped, having Zillow pay $1,500 of your closing costs is a massive win.

The Potential Downside: By committing to the bundle, you are limiting your choices. You might be paired with an agent who isn't the best negotiator in your town, just because they are in the Zillow network. You have to ask yourself: Is a $1,500 discount worth using an agent I didn't personally vet?

The "1% Down" Program

In an aggressive move to attract first-time buyers who are struggling with affordability, Zillow launched a 1% Down Payment program. This is their headline feature for 2025.

Most first-time buyers think they need 20% down (false) or at least 3.5% for an FHA loan. Zillow creates a unique workaround.

How the Math Works:

  • Standard Conventional Loan: Requires 3% down. On a $400,000 home, that is $12,000.
  • Zillow's Program: You contribute 1% ($4,000). Zillow contributes the other 2% ($8,000) as a grant.
  • The Result: You hit the 3% requirement, but only $4,000 came out of your pocket.

Is it "Free Money"? Yes and no. The 2% grant does not have to be paid back. However, because you are putting down so little, your monthly payments will be higher (since you are borrowing more), and you will have to pay Private Mortgage Insurance (PMI).

The Eligibility Catch (The AMI Limit): You cannot just be a millionaire and use this to buy a rental property. This program is strictly for borrowers whose income is below 80% of the Area Median Income (AMI) where the home is located.

  • Translation: If the median income in your county is $100,000, you generally must earn less than $80,000 to qualify.

The User Experience

Since Zillow is a tech company, you would expect their digital experience to be flawless. For the most part, it is.

The Dashboard: Once you apply, Zillow gives you a "My Mortgage" dashboard. This is cleanly integrated into the main Zillow app. You can upload W-2s, bank statements, and tax returns directly from your phone. The status bars (e.g., "Underwriting," "Clear to Close") are easy to understand and reduce the anxiety of wondering where your loan stands.

The Human Element: This is where Zillow differs from a traditional bank. Zillow Home Loans is online-only.

  • You will be assigned a Loan Officer, but they are likely in a call center in Kansas or Arizona.
  • You will communicate via email, text, and phone.
  • The Risk: If you have a complex issue—like a last-minute problem with your down payment wire transfer—you cannot walk into a branch and sit down with a manager. You are at the mercy of the call center queue.

For a tech-savvy millennial, this is fine. For someone who wants hand-holding, it can be stressful.

The Competitors (Who Else Should You Call?)

While Zillow is convenient, they aren't the only game in town. If you want the best deal, you must compare them against the heavyweights.

1. Rocket Mortgage (Best for Speed & Tech)

If Zillow is the king of browsing, Rocket Mortgage (formerly Quicken Loans) is the king of the process. They are the largest mortgage lender in America for a reason.

  • The "Verified Approval": In a hot market, sellers are picky. A standard pre-qualification letter isn't worth much. Rocket’s "Verified Approval" fully underwrites your income and credit before you even make an offer. It tells the seller, "We have checked this buyer's bank account, and they are 100% good for the money." It is almost as strong as a cash offer.
  • The ONE+ Program: Rocket has a direct competitor to Zillow's 1% program. With ONE+, you put down 1%, Rocket covers the other 2%, and they pay for your Mortgage Insurance (PMI) for the first year. That PMI removal is a massive monthly savings that Zillow typically doesn't match.
  • The Speed: Rocket’s "Rocket Logic" AI technology can often clear files in days, not weeks.

Verdict: Choose Rocket if you need to move fast and want a 100% digital experience that won't miss a closing date.

2. Chase Home Lending (Best for Relationship Pricing)

Zillow and Rocket are "non-bank" lenders. Chase is a traditional big bank. This gives them a unique advantage: They hold your money.

  • Relationship Discounts: If you already bank with Chase (or open an account), they often knock points off your interest rate.
    • Example: Holding $150,000 in Chase accounts might get you a 0.125% rate discount. It sounds small, but on a $500k loan, that saves you thousands over 30 years.
  • The Grants: Chase is very aggressive with Community Lending. In certain census tracts, they offer a $5,000 or $7,500 Homebuyer Grant. Unlike Zillow's 1% down, this can sometimes be used for closing costs or down payment, and it usually has fewer strings attached regarding income limits.
  • The "Branch" Factor: You can walk into a Chase branch and talk to a Loan Officer face-to-face. For a nervous first-time buyer, this human connection is invaluable.

Verdict: Choose Chase if you already bank there or want to see if you qualify for their free grant money.

The Hidden Costs (How to Read the Fine Print)

This is the most critical part of the review. Lenders love to play games with "Points" vs. "Rates."

Zillow might show you a rate of 6.5% on the app. Rocket might show you 6.75%. Chase might show you 6.99%.

You instinctively want to click on Zillow. Stop. You need to ask: "What is the cost to get that rate?"

  • Discount Points: A lender might offer you a lower interest rate, but charge you thousands of dollars upfront (called "Points") to get it.
  • The Trick: Zillow's quoted rates often assume you are paying for points. Rocket's might not.

The Solution: You cannot compare them based on the pretty numbers on their websites. You must get the official government document called the Loan Estimate (LE).

  • Look at Section A (Origination Charges). This is the fee the lender charges to do the paperwork.
  • Look at Section J (Lender Credits). This is the money they are giving you back.

How to Shop (The Strategy)

Here is the secret lenders don't want you to know: You should apply to all three.

Many beginners are scared to do this because they think it will ruin their credit score.

Here's the truth. The credit bureaus (FICO) treat mortgage shopping differently. All mortgage inquiries made within a 14-to-45 day window count as just ONE single hard pull on your credit score.

The Strategy:

  1. Apply to Zillow, Rocket, and Chase on the same day.
  2. Get the official Loan Estimate from each one. (Do not accept a verbal quote or a text message. Make them send the PDF).
  3. The Negotiation: Take the cheapest quote and email it to the other two.
    • Script: "Chase offered me a 6.5% rate with $0 in origination fees. I like your app better, Zillow, but can you match this?"

You will be shocked at how quickly a lender will suddenly "find" a manager's coupon or a rate concession when they know they are losing the deal to a competitor.

Is Zillow Home Loans Good?

Zillow Home Loans is a solid "B+" option. It is a legitimate, safe lender with excellent technology and aggressive programs for low-income buyers.

  • Go with Zillow if: You prioritize simplicity above all else. If you are already browsing on the app, using a Zillow Agent, and want to keep your entire home-buying life in one digital dashboard, their ecosystem is unbeatable. The "1% Down" program is a genuine lifeline for cash-strapped buyers.
  • Go with Rocket if: Speed is your priority. If you are in a bidding war and need a "Verified Approval" to convince a seller you are serious, Rocket is the gold standard.
  • Go with Chase if: You want the lowest possible rate through relationship discounts or want a local human to guide you through the paperwork.

The Golden Rule: The "best" lender is simply the one who gives you the money for the lowest cost. Use Zillow's convenience to start the conversation, but make Rocket and Chase fight to finish it.