Have you ever applied to get a mortgage loan?
Then you know how painful the process can be. There’s a reason realtors tell you to get pre-approved before you start looking for houses. It’s because the mortgage loan approval process generally tends to take for-ev-er.
First, there is the application process, which, if you’re lucky can be done online. But that’s often where the “convenience” ends.
Weeks of back-and-forth emails, phone calls, scanning, faxing and personal visits with your traditional mortgage loan officer ensue, and then if you’re lucky the powers-that-be (the mortgage company’s underwriting team) gives you the blessed letter of pre-approval.
And if you weren’t already aware, this process actually is costing you in the neighborhood of $8,000 -the amount of money it currently costs to create your mortgage.
My Experience with the Traditional Mortgage Loan Process
In our twenty-plus years of marriage my husband and I have purchased three homes: our starter home, our second home, and our hobby farm.
I still remember the loan approval process for our hobby farm to this day. Even as someone who had spent five years working as a mortgage loan assistant, it was ridiculous.
At the time I thought “This will be a piece of cake for me”, since I’d been in the business and knew generally how the process worked.
The Current System Sucks
With a mortgage application process at a traditional bank, you’re tied to their timeline. You put in the application, the loan officer reviews it and submits it (when he or she has time: remember you are competing with several other applicants), and then the file goes to the underwriter’s desk.
The underwriter also reviews it, when he or she has time. Depending on the number of files sitting on their desk, it may take a week or even longer before the underwriter can look at it.
When we were purchasing our hobby farm there were weeks of communication between the loan officer, the realtor, and us.
Documents submitted, and then more documents needing to be sent. I remember feeling stressed out for two solid weeks, wondering if we’d get approved and worrying that someone else would come in and scoop the property out from under us with a large check and would pay cash for the house.
To put in plain English – it sucked.
What If Someone Uber-ized It?
We all saw how Netflix came in and made sense of the video rental industry and then watched Uber in amaze when they told us we didn’t need to stand in the rain and wave down a taxi, only to overpay for the added value of the body odor sticking to your clothes for the rest of the day.
Now there is a company doing the same in the mortgage world – they are telling us we don’t have to play the $8,000 game of give us a hours of your time, send us gobs of paperwork, and maybe we will approve you….and maybe not.
CEO and Founder, Jason van den Brand, created Lenda to bridge the missing link between you (the lendee) and the loan through the use of technology.
By creating an online application procedure that can be completed quickly, Lenda can have you approved for a mortgage loan nearly 3.5 times faster than a traditional lender can.
In fact, they’ve even helped some clients get a loan closed in as little as 17 days from application to closing.
How Is Lenda Doing This?
One of the really overwhelming things about the mortgage application process is that many lenders aren’t clear with clients about how the mortgage approval process works.
“It’s made to be confusing. The less you know, the more you are going to pay.” – Jason Van Den Brand
Lenda’s experienced home loan advisors can help you understand right off the bat the answers to those common mortgage-related questions. Questions such as:
How Much Mortgage Can I Afford?
It’s tough to be sure about just how much of a mortgage payment you can afford if you are considering buying a home.
Not only do you have to know what the base payment (principal and interest on the loan) is, you need to know the full payment including principal and interest, taxes, homeowners insurance and any possible private mortgage insurance payment amounts as well.
Lenda advisors can give you that information promptly so you can begin your home search as quickly as possible.
What Will My Interest Rate Be?
Interest rate questions are all too common during the mortgage approval process. There’s the base rate, the APR, the variable rate, the fixed rate and a variety of loan terms to choose from as well.
Lenda makes it simple and offers mortgages in 30-year, 20-year and 15-year terms.
Jason explains the current model of the home loan to go as such:
“They (the banks) give you a quote to draw you in, send you through weeks of back and forth paperwork, and then close you at the end and slip in an extra 1/8th % APR. After going through this painstaking process, an 1/8th % may not seem like much and the banks know you aren’t interested and starting the process over again. However, that 1/8th % will mean thousands of dollars extra you will pay in the long run.”
Lenda’s philosophy is you get the interest rate you were originally shown. Period.
How Long Does It Take?
As I mentioned above, one of the biggest problems with traditional mortgage loan applications is it can take weeks to find out whether or not you’ve been approved for a loan.
And it’s stressful.
With Lenda’s online home mortgage process, you’re approved much faster, because the system is setup to accomplish everything from your home computer. Here’s how the mortgage approval process works with Lenda.
1. At the Lenda home page, you click on either the “Buying a Home” or “Refinancing a Home” box. Yes, Lenda does both purchase loans and home refinance loans as well.
2. Once you click on the appropriate box you’ll answer a few simple questions about your situation, such as your household income.
3. Next, you’ll see a box with information on what types of rates you qualify for. Note that you don’t have to enter your Social Security number to get this rate information.
4. In this step Lenda shows you what steps you might be able to take to improve your rate. Now, that’s cool! Lenda also shares potential mortgage costs here as well.
5. If you like what you see, now is the time to submit your official mortgage application and credit check approval. There’s no application fee or other costs to apply with Lenda.
6. Lenda sends you all of the required mortgage disclosure documents – again, this is done online for faster results.
7. The system tells you what types of documents you’ll need to send in for verification and allows you to upload them all online. Once you’ve completed this step your information is sent off to the underwriting team for final approval.
Here’s what to expect after you login, and steps to take:
Step 1: Choose whether your loan is for a home purchase or refinance. Fill out the purpose and the following boxes, all the way to your estimated credit score.
Step 2: Move the rate quote tool that aligns with your target monthly mortgage payment.
Step 3: Select your rate.
Bonus: you can check the status of your loan anytime day or night be logging into the site.
Other Information About Lenda
As of right now, Lenda is operating in five states: California, Washington, Oregon, Colorado and Texas.
After talking with Jason, a handful of states will be added each quarter and Lenda will soon service the entire United States.
You can check Lenda’s site to find where they are currently operating.
The Lenda loan process will be easiest for those with good to excellent credit and those who have a good understanding of technology, however anyone is welcome to apply.
If you are in the market for a home purchase loan or home refinance loan, Lenda can help make the process much faster and easier for you.
The Podcast Interview with Lenda
Peach interviewed Lenda’s CEO not only to ask him about Lenda, but to understand his story of creating Lenda. Below is the interview from Episode 64 of the Money Peach Podcast (found anywhere you can listen to podcasts).