Two years after dipping its toes into mortgage lending as part of an effort to make it easier for homebuyers to buy homes from the company, direct homebuyer Opendoor is officially expanding into the mortgage lending business.
Opendoor announced Thursday that it is launching Opendoor Home Loans, which is a planned widespread expansion of its burgeoning mortgage business.
Interestingly, the company’s mortgage business will not be limited to people who want to buy homes from Opendoor. According to the company, anyone who wants to buy a home can use Opendoor as their mortgage lender.
To repeat, Opendoor Home Loans, which is currently available for borrowers in Arizona and Texas, is available to all eligible borrowers in those states, not only those who want to buy a home from Opendoor.
Opendoor is an iBuyer, one of a growing spate of companies that buy homes directly from sellers, prep them for sale by making any necessary upgrades and improvements, then selling the home through their marketplace.
Beyond Opendoor, companies like OfferPad, Perch, and many others offer similar services. Meanwhile, real estate giants like Redfin, Zillow, Keller Williams, and others have also expanded into buying homes directly from homeowners.
Redfin and Zillow have also launched mortgage businesses in the last few years, with Zillow buying its way in with the purchase of Mortgage Lenders of America last year.
Redfin, on the other hand, has been building its mortgage business internally, as Opendoor has done over the last few years.
And now, Opendoor is ready to expand its mortgage business.
According to the company, Opendoor built its mortgage experience “from the ground up” over the last 10 months, taking into account the company’s experience in the real estate market over the last several years.
“To build Opendoor Home Loans, we started with what we’ve learned from buyers. Having helped over 50,000 customers buy or sell with Opendoor and hosted over 1 million on demand self-tours of Opendoor homes, we know our customers value flexibility, simplicity and speed,” Nadia Aziz, head of Opendoor Home Loans, said in a blog post on the company’s website. “We’ve taken those same principles and applied it to the home loan process.”
According to Aziz, prospective borrowers can prequalify for a mortgage in “minutes” on the company’s website and/or mobile app. From there, they can use Opendoor as their lender whether they’re buying one of the houses Opendoor owns or not.
The company states that it is offering customers “savings from start to finish,” including “competitive interest rates, no lender fees, and for a limited time, up to $1,000 towards buyer closing costs.”
Opendoor is also offering a “guaranteed on-time close,” wherein the company promises to close a borrower’s mortgage on the scheduled closing date. If the company is not able to close the loan on that date for any reason, Opendoor says that it will credit the borrower $100 per day that the loan is late.
According to the company’s website, Opendoor Home Loans is offering conventional fixed-rate mortgages, with 30, 25, 15, or 10 year terms, and adjustable rate mortgages, with five, seven, or 10 year fix terms for a duration of up to 30 years, with as little as 3% down.
Opendoor Home Loans is not, however, offering Federal Housing Administration or Department of Veterans Affairs mortgages.
The company also states that its borrowers must have a minimum credit score of 620, and borrowers who have a bankruptcy on their record may be eligible for a loan as well, as long as the bankruptcy is more than four years in the past.
As stated above, Opendoor Home Loans is now available to all eligible borrowers in Arizona and Texas. The company states that it plans to expand its mortgage business to more states “soon.”
Published at Thu, 29 Aug 2019 18:06:00 +0000