LendingHome, the San Francisco mortgage company, is aiming to expand its market for loans by going after first-time homebuyers.
According to a report in TechCrunch, LendingHome launched a new financing product that lets people shopping for a home get an interest rate estimate and apply over the internet, without having to fill out paperwork or deal with a loan officer who will typically ask a lot of questions and put would-be borrowers through all the paces.
With the new product, LendingHome told TechCrunch it thinks it can quicken the process of getting a mortgage and make things more transparent — all while lowering the costs that come with originating a new mortgage loan.
Matt Humphrey, the chief executive of LendingHome, said in an interview that because the company started out focusing on bridge loans, a market that isn’t served by a lot of banks and mortgage lenders, the company had to create its own infrastructure and risk models to determine if a borrower was creditworthy. Once it did that, it would turn around and partner with institutional lenders to acquire the loans.
With more than $1 billion in loans being issued, the company decided it was time to branch into the wider consumer mortgage market. With its new product, LendingHome said it’s setting its sights on the 15.8 million home buyers who are forecasted to enter the market by 2025. That customer base is expected to increasingly include millennials who are purchasing their first homes.
While 90 percent of homebuyers will use the internet to research homes, they still go offline to get their mortgages, presenting a big opportunity for LendingHome, the CEO said. Instead of talking to multiple loan officers, borrowers of the platform can choose from a variety of different loans and track the progress of their application.