About Clara Lending

You’re about to make one of life’s most important decisions, and it seems like everywhere you turn, the process of buying a home or refinancing a mortgage is fraught with stress, delays, hidden costs, and confusing jargon. Is there an end to this madness?

Clara Lending, a new company based out of San Francisco, claims their advanced technology and dedicated support can take the home financing process from stressful to simple and transparent. Instead of nothing but obstacles like traditional lenders, Clara promises to reduce the time and money it takes you to get a loan.

How? According to the company, most loan applications contain 1,600+ data points, which are collected, checked, and re-checked manually, and which takes a great deal of time and manpower. Instead, Clara Mortgage claims their software-based lending platform “coordinates the workflow,” thereby reducing inefficiencies and errors. Here are some more benefits promised by Clara:

  • Streamlined loan application via phone or online, with expert support available
  • Application and documents are reviewed upfront, so you can be more confident of a successful closing
  • Clear-cut costs and fees, with no hidden surprises

Whether you’re buying a new home or looking to refinance and save on your monthly payments, you don’t want this exciting time to turn into a drag. Can you really expect Clara Lending’s technology-focused approach to deliver, or will it just burst your bubble? Here, we’ll help you make a more informed decision.

Your Mini-Guide to Shopping for a Home Loan

Even if this is your first home loan, you probably understand that there are a lot of moving parts involved. However, there are several pointers that can help make things easier, regardless of where you are in the process.

Shop Around

To start, don’t settle on the first lender you contact. Instead, the Federal Trade Commission recommends obtaining information from several different lenders, so that you can make sure you get the best rate. If you’re thinking about going through a broker to help you find the best deals, be sure to also contact more than one. To help streamline the process, check out the FTC’s Mortgage Shopping Worksheet.

Your Initial Rates Aren’t Guaranteed

Second, remember that the rate you’re initially quoted may not be the rate you end up with. Why? Because the pre-approval process is much less stringent than after you formally apply. As a result, once underwriting has all the information in front of them and crunches the numbers, they might encounter factors that make your loan more or less risky.

Interest Rates Aren’t the Whole Picture

Third, your interest rate is important, but it shouldn’t be the only factor you consider when choosing a loan. For example, if you’re offered a lower APR that’s variable, this means it could change after a set amount of time and drastically increase your expenses.

Also, some lenders may charge points, a whole host of fees (underwriting, broker, closing, etc.), higher down payments, and other financial factors that can impact your overall costs. Speaking of down payments, remember that if you don’t put at least 20% down, you’ll probably have to pay for private mortgage insurance, further increasing your monthly payment amount.

With this firmly in mind, let’s take a closer look at Clara Lending.

What Loans Does Clara Lending Offer? What Are Their Fees?

Clara currently offers four loan types: 30-year fixed, 15-year fixed, 5-year ARM, and 7-year ARM. Important note: At the time of our research, Clara loans were only available in California.

In order to see real time rates on the Clara website, you’ll need to enter the loan type (purchase or refinance), property type, and intended use; your credit score and zip code, estimated property value, and down payment amount.

Afterward, you’ll redirect to a page that gives you a brief overview of each product. For more information, you can click the See Details button.

Clara Lending Fee Breakdown and DetailAfter clicking the See Details button, you’ll be able to view important details about Clara’s products, including an in-depth breakdown of fees.

After changing several of these variables, it appeared that most of Clara Mortgage’s interest rates ranged between 3.187% and 3.906%, monthly payments between $1,592 and $2,486, with closing costs anywhere between $5,716 and $8,093.

Pro tip: Changing zip code seemed to have the most impact on these numbers, but only on closing costs.

Need help navigating the process? Have questions? Clara’s expert customer service team can be reached at (844) 846-7948.

How do these fees stack up against the competition?

What Makes Clara Lending Unique?

The “transparency through technology” motto seems to be taking the lending industry by storm, as major players like Rocket Mortgage (a division of Quicken Loans) and LendingHome also promise to use technology to make the process easier and more transparent.

We’re seeing much of these same things occur within the student loan refinancing space as well, through companies like SoFi, LendKey, and Earnest. It makes sense, because the way we obtain and refinance mortgages has remained pretty much the same for decades, so a shakeup was in order.

Here’s the thing, though: In our experience, many of these lenders offer relatively similar rates, promises of fantastic customer service, and ease of doing business—and we have no reason to doubt them. So, it’s often their underwriting criteria that makes the biggest difference between one that might be perfect and one that falls short, based on your needs.

For example, Rocket Mortgage spent years perfecting their software to make obtaining mortgages as hands-off as possible, although they might not be the best option for someone who has a fluctuating income, started a business within the last year, or has poor credit.

On the other hand, LendingHome claims to (sometimes) close loans in less than a week after only a 5-minute application process, although they tend to use strict underwriting criteria, similar to traditional banks. So if you require some wiggle room, they might not be your first choice.

Comparatively, we’re provided essentially no insight into Clara Lending’s underwriting criteria. Or, other than their simple process (which is what everyone else is claiming, too), exactly what differentiates them from the stiff competition.

But this is just what we learned during our research. What are actual Clara clients saying?

Are Clients Loving Clara Mortgage?

Although Clara Lending was founded in 2014 by Lukasz Strozek and Jeff Foster, there was very little customer feedback about the company, and they weren’t listed with the Better Business Bureau.

In fact, the only online Clara reviews we found were on LendingTree, where 4 reviewers gave the lender a 4.8-star average rating, with 100% saying they would recommend the company. Common compliments cited fast approval, excellent customer service, and an easy closing process. The one complaint referenced closing fees that frequently changed and ended up $2K higher than expected.

Important note: A couple of these reviews referenced the name Expedite Lending, so it seems Clara may operate under two different names.

Alright, we’ve covered a lot of ground, so let’s bring everything home.

Is Clara Lending the Clear Choice for Your Home Loan?

There’s no doubt that Clara Lending is a legitimate company who can make obtaining or refinancing a home mortgage as easy as possible. The crux of the issue is that nearly all of the competition makes these same claims—but without at least some basic underwriting criteria (something that most others provide), you can’t be sure how they really stack up without taking the time to apply.

To this extent, we experienced some technical issues on Clara’s website. First, after pressing the Start Application button and entering a non-California zip code, the screen just kept resetting itself, with no indication as to what was occurring. Only after browsing the website elsewhere did we learn that the company only lends within CA.

In addition, after entering data into their calculator, obtaining rates, and then changing the assumptions, the system would just keep “thinking.” Only after refreshing the page would each field populate with information.

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