FinTech: Redefining Mortgage in America

Mortgage loan agreement
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Fintech startups, because of their ingenious use of alternative data, now rule the financial services industry in the United States. In just a couple of years, they have dethroned traditional lenders to claim the lion’s share of the unsecured loan market.

In 2018, FinTechs served 38% of all personal loan borrowers. This figure was a vast improvement from just 5% in 2013. In comparison, banks, credit unions, and finance companies only had 28%, 21%, and 13% market shares, respectively, in 2018.

Now, they are beginning to conquer the secured loan market. If you are planning to buy a piece of real estate in Grand Lake or anywhere else in the country, strongly consider working with a FinTech to get better mortgage conditions.

Below are some of the FinTechs that are changing the rules of the real estate game in their ways.

BoardRE

Also known as Board, this upstart FinTech company can buy your property of choice cash on your behalf. Board will act as your lender and provide you with a loan with up to 95% LTV through its finance department.

As usual, you have to submit the necessary documents to know the mortgage size and interest rate you qualify for. The whole underwriting process is automated so that you can get approved in just less two hours. Board conducts a desktop appraisal to determine whether the loan amount is enough for the market value of the property.

An all-cash offer gives you the edge over other buyers that rely on a mortgage. A seller may be compelled to work with you, for Board can close the deal faster. The company does not charge extra for its service and employs commissioned-free loan officers. Its sole source of income is the interest added to the principal.

loanDepot

The FinTech digitizes every stage of the mortgage application process. Once you send the necessary documents about your income, employment, and assets, the company’s proprietary loan engine technology will verify and import everything digitally so that a lender can review your details more quickly.

loanDepot claims to get a loan application approved in as little as seven minutes and reduce the closing time up to 75%. In other words, using its service can help you obtain a mortgage in just eight days.

Redfin

Mortgage contract

This listing site is bent on taking out a real estate agent out of the equation to help both sellers and buyers save money. With its Redfin Direct program, it generates its revenue by charging a 2% listing fee while giving both parties the freedom to negotiate. Without a third party, a buyer could produce a better offer, allowing the seller to pocket a higher percentage of the sale proceeds.

ZeroDown

This FinTech provides a lease-to-own program to help you live in a property you wish to buy without purchasing it outright. ZeroDown will buy a house of your choice and rent the place to them with the option to buy it later on. The company charges a flat $10,000 fee up front and covers big-ticket repairs while you lease the property.

For every monthly payment, you will earn “purchase credits” you can cash out within two years. If you decide to move forward with your purchase, you can obtain a mortgage and use the funds you earn from your ZeroDown house to cover the upfront expenses.

Working with FinTech is not for everybody, but it is a viable option to avoid the usual headaches of dealing with a typical mortgage lender.