Even just a couple years ago, if you were looking to refinance your mortgage, you almost certainly would have had to go through a traditional bank—and experience all the paperwork, fees, long wait times, and less-than-stellar customer service that often accompany it.
Today however, this is quickly becoming a thing of the past. In fact, with direct lenders like Lenda, they claim that you can now refinance your home quickly and conveniently—and score low rates and fees—completely online.
This way, Lenda promises to help you avoid wasting time shopping around, to provide complete transparency and accurate rates, and to prioritize customer convenience. And because this process reduces costs, not to mention time, Lenda then passes these savings on to you.
Applying for a Lenda refinance loan works over four steps:
- Get your custom quote – According to the company, “we ask the right questions and quote accurate fees up front,” which means that you’ll get the right quote based on your situation in seconds. Simply input your estimated home value, current mortgage amount, and approximate credit score.
- Submit your application – Lenda claims you’ll be able to refinance completely online from the comfort of your home.
- Verify & document – Instead of dealing with reams of paper and trips back and forth to the bank, you’ll be able to verify credit scores, upload documents, and access the real-time status of your loan online through your secure portal.
- Close your loan – Lenda claims to underwrite, appraise, and close their loan 3 times faster than the industry average.
Taken together, this is why Lenda’s brand of refinancing is considered “self-serve,” and why the company claims to be the “easiest way to refinance your home loan online.”
Just because Lenda’s easy, though, does this mean they’re right for you? Do they offer competitive rates? Are there any important factors you should be aware of? We’ll start off taking a look at Lenda’s nitty-gritty details.
What Are Lenda’s Rates, Fees, & Eligibility Criteria?
Currently, Lenda only offers four different refinance products at the following rates:
- 10 year fixed: 2.5%-2.875%
- 15 year fixed: 2.625%-3%
- 20 year fixed: 3.375%-3.75%
- 30 year fixed: 3.25%-3.625%
Note: These rates were based on assumptions of a $300,000 current mortgage balance with a home value of $500,000, in zip code 91501 and a credit score of 700-719. Rates can also change daily depending on a number of factors outside of your control.
How to Obtain a Lenda Quote
To get your initial rate, you’ll only need to spend a couple minutes inputting information like your current mortgage balance, estimated home value, zip code, and estimated credit score. Then, after clicking on the See My Rates button, you’ll be able to select your interest rate from a sliding scale and immediately watch how it impacts your loan terms.
Note: In order to view your rates, you’ll have to create an account by entering your email address and choosing a password.
If you click on the Show Loan & Fee Details button, you’ll also be able to see how much you’ll need to pay out of pocket, estimated closing costs, and monthly payment details.
The more information you add to your Lenda quote, the more accurate it’ll be, which is visually represented by a colored “Quote Strength” bar in the lower left-hand portion of the screen. To add more, click on the Show Advanced Options button underneath.
Ready to move forward? A Lenda Home Loan Advisor will contact you and verify that you’re ready to lock in your rate, which will remain good for 30 days.
What Fees Does Lenda Charge?
Lenda doesn’t charge a fee to pull your credit during the application process, nor any origination fees or broker commissions. However, they do generally charge:
- Closing/Escrow Fee
- Lender’s Title Policy
- Recording Service Fee
- Appraisal Fee
- Taxes & Government Fees
Lenda may also charge other fees, depending on the circumstances surrounding the property (such as pest inspections, surveys, HOA certifications, and more).
Are You Eligible for a Lenda Home Refinance?
Like most lenders (more about this in a second), Lenda only tells us a little about their eligibility guidelines and underwriting criteria.
You can’t have had a foreclosure within 7 years or a bankruptcy within 4 years, and you must have a 640 or higher credit score. You’ll also need to be located in either CA, OR, or WA (the company promises to roll out more states soon).
Regarding their products, Lenda can’t provide sub-prime loans, adjustable rate loans, or home equity lines of credit, or provide loans on manufactured homes, mobile homes, or for commercial properties. You can, however, get a loan for an investment property.
Are Lenda’s Clients Happy with Their Refinance Experience?
Lenda was originally launched in October 2013 by Jason van den Brand and Elijah Murray, who were looking to automate much of the mortgage process.
In other words, instead of employing dozens (or perhaps hundreds) of people who basically just pass paperwork between one another, they wanted to build software that could do it more accurately and in much less time. Then, by cutting out much of the middlemen, they could pass meaningful savings on to their customers.
Despite the fact that Lenda’s been in business as long as they have, we didn’t find any direct online customer feedback about the company or their refinancing process during our research. Sure, the company’s business model has attracted a lot of media attention from the likes of Forbes, Yahoo! Finance, NY Times, Wired, and more, but these are high-level and don’t talk about personal experience.
In fact, the only content we found that referenced Lenda’s pros and cons was on NerdWallet, who liked Lenda’s faster process and lower fees, but didn’t like their limited market and the fact that they only refinance.
How does this compare to the competition?
Are There Other Alternative Mortgage Lenders Like Lenda?
It’s only a matter of time until the Internet and modern computing technology impact every imaginable business space, and right now seems to be the time for the lending industry. Not just for other mortgage lenders like Quicken Loans (the originator), Rocket Mortgage, and SoFi; but also for businesses (FundBox and BlueVine) and those with student loans (Earnest and CommonBond).
Specifically regarding mortgages, the key thing to remember here is that each of these online-only companies claims to offer many of the same benefits: easy access to accurate, competitive rates; low-to-no fees, fast approvals, and exceptional customer service. So, these things alone might not meaningfully distinguish Lenda from the competition (again, we can’t be sure since there’s no online customer feedback).
Let’s carry this thought over to the next section as we wrap things up.
Is Lenda a Solid Option for Refinancing Your Mortgage?
Given Lenda’s closely matched competition, the main advantages offered by these online-only lenders is time on the front end; namely, obtaining accurate rates. This way, you don’t have to submit your personal information to some company that sells it to the highest bidder, and you don’t have to spend time getting individual quotes from every lender out there.
Once you decide to proceed with Lenda (or most of their competition), keep in mind that much of your time savings will disappear. This is because the full application can take about 45 minutes to complete, and it will still take you 25 days (or more) to close due to government regulations.
Another factor to consider is that most of the competition keeps their customer service in-house in order to maintain high quality. However, after your loan is complete, Lenda no longer services your loan: “When your loan funds, we tell you who to make payments to and how to make them. We have vetted the quality of each servicer we work with.” Unfortunately, the company doesn’t provide any additional insight.
With zero online client feedback, despite 2.5+ years in business, it’s difficult to say what you can realistically expect from Lenda. They’re certainly a legitimate company based out of San Francisco who’s raised millions in funding, but whether or not they’ll be able to compete in an increasingly crowded marketplace remains to be seen.
Did you apply for refinancing through Lenda? Add to the conversation and write your very own review below!