Real estate digital platform Opendoor has launched a financing app that the company claims lets consumers get pre-approved for a mortgage in under two minutes.
The app, which went live Thursday (June 2) for customers in California, is part of the company’s suite of products, which include Buy with Opendoor, Opendoor Backed Offers, and Opendoor Complete, the company announced on its website.
“With this new financing app, Californians can better understand their loan options and the down payment they need to buy a home,” said Heather Harmon, co-head of Opendoor Homes Brokerage. “They simply download the app and answer four short questions.”
The company said its technology then identifies loan options based on the customer’s needs and criteria, including mortgage rate, guidelines and terms, and the down payment required.
Opendoor said the app processes more than 10,000 data points in seconds to determine the maximum home purchase price a buyer can afford based on their qualifications and the minimum down payment for available loan options.
“Those who have ever applied for a mortgage know how cumbersome the process can be,” said Harmon. “Gathering countless documents from multiple sources. Endless questions about employment status or discrepancies between credit reports. It can take days if not weeks to get pre-approved. Just enough time to watch a dream home go to another buyer.”
PYMNTS examined the digitization of the mortgage process earlier this year in a conversation with Ziggy Jonsson, head of financial products for Better Mortgage.
That company was founded after CEO Vishal Garg went through the exact thing Harmon described: he and his wife missed out on their dream home after weeks of navigating the mortgage process over the phone and through paperwork sent via mail.
“Lenders who aren’t online have to work with a lot of paperwork and do it by hand, and that’s why their turnaround time is usually 45 to 60 days to approve and process a loan,” Jonsson said, adding that these traditional mortgage processes have fees and costs to cover the work happening behind the scenes.
By eliminating a lot of that work, a fully digitized platform also reduces costs, ultimately saving borrowers money that can go toward purchasing a home, Jonsson said.