LendingHome targets first-time homebuyers with online technology

LendingHome has spent the last several years focusing on building technology that would help real estate investors get mortgages. Now, the San Francisco-based company is looking to expand by offering more traditional mortgages to consumers, with their focus being on first-time homebuyers.

The company’s new home financing product will allow consumers that are looking to purchase a home get a rate estimate and apply online, without any of the hassle’s associated with using an offline loan officer. LendingHome believes that this new product will speed up the process and make things more transparent for homebuyers. Meanwhile, the product will lower the costs associated with originating a mortgage.

LendingHome, founded in 2013, began issuing loans about a year after its founding. At launch, the lender focused specifically on bridge loans, mostly focusing on serving real estate investors who bought properties to fix and flip. This focus helped fill a customer need in a market where borrowers were unable to get financing, according to founder and CEO Matt Humphrey.

LendingHome was providing a capital in an otherwise underserved market, therefor it had to develop its own infrastructure and create its own risk model to determine the creditworthiness of borrowers, Humphrey said. The company was then able to partner with institutional lenders to purchase those loans.

LendingHome has now proven its technology by issuing more than $1 billion in loans to date – now the company is looking to go after a much larger consumer mortgage lending market.

The company will now be going after the 15.8 million homebuyers that are projected to be in the market by 2025. Increasingly, that customer base will consist mostly of millennials looking to buy their first home.

While 90 percent of customers use online resources to research homes before they purchase, most of them don’t know how mortgage lending works. Today, more than 80 percent of mortgages are issued offline, Humphrey said. This opens a huge opportunity for companies, like LendingHome to jump in and capture borrowers as they move online.

LendingHome has developed a streamline process of finding out what mortgage terms the borrower might qualify for, then locking in a rate and applying online. Instead of going back and forth with a loan officer, borrowers are able to choose from a variety of loan products and track the process of their application through a personalized dashboard.

Humphrey believes that by moving the process online, the company will be able to make the process much more efficient.