Reali (formerly Lenda) is a direct lender sending ripples through the traditional mortgage banking industry. The entire home loan process is entirely online, with interactive tools available to help borrowers make the best decision possible.
While mortgages are currently limited to just a handful of states, residents in those areas can benefit from a seamless mortgage.
Keep reading to find out where you can get a mortgage, what types of home loans are available, and how the application process works for borrowers.
Mortgage Application Requirements
Currently, only residents in the following states qualify to even apply for a Reali mortgage: Arizona, California, Colorado, Florida, Georgia, Illinois, Michigan, Oregon, Pennsylvania, Texas, Virginia, and Washington. However, the company is continuing to expand, so keep checking back to see if your state is added when you’re ready to apply for a mortgage.
What kind of credit score does Reali require?
Borrowers must have a credit score of at least 620. This is in keeping with conventional loans that conform to Fannie Mae and Freddie Mac mortgage standards.
Reali also works with some less common types of borrowers.
For example, they can accommodate self-employed individuals with at least two years of tax returns. Additionally, Reali can refinance borrowers who own as many as six properties.
Types of Home Loans Available
Reali offers fixed-rate home loans in a variety of terms. You can get mortgage lasting 10, 15, 20, or 30 years. Because these are all conforming loans, you may be able to qualify for a lower interest rate than you would with a government loan such as an FHA.
Refinancing is also available through Reali, which could help you cash out equity in your current home, lower your rate, change your loan term, or drop your PMI on your existing mortgage.
Choosing Your Loan Term
With so many loan term options available from Reali, it’s worth considering how to pick which one is best for your mortgage. Typically, the shorter your loan term, the lower interest rate you’ll receive. In fact, you could save close to a whole percentage point.
But there is a downside of picking a shorter loan term.
Even though you’ll pay less in interest over time, your monthly payments will be significantly higher since you’re spreading them out over a much shorter time period. Part of Reali’s mortgage application process actually entails seeing what changes when you alter different loan terms. That way you can see what the different numbers look like for a 10-year, 15-year, 20-year, or 30-year mortgage with Reali.
Also, consider how long you plan on living in your home before selling. Of course, things can change, but how long you stay there may influence your decision.
If you plan on moving within a few years, you may not worry about how much interest you’re paying because you won’t be getting that far into your payments anyway. But if you plan on being there for a while, or perhaps if you’re nearing retirement age with a looming income decrease, you may try to pay it off more aggressively so you can save on interest over time.
Limitations of Mortgage Types
One area where Reali falls short is that it only offers fixed-rate conventional loans. That means there are no government loans available at this time. So if you’re looking for an FHA loan, a VA loan, or a USDA loan, you’ll need to look elsewhere.
The same holds true for adjustable-rate mortgages — Reali simply doesn’t have them at the moment.
Fees and Rates
Reali boasts that they have no origination fees or broker fees in order to keep costs low for borrowers. One thing you will have to pay for upfront once your application is underway is the appraisal fee. The appraisal is a necessary part of any home loan process because it ensures the home you’re buying is valued for at least as much as the purchase price. If not, you can’t get a loan.
While many lenders simply roll the appraisal into your closing costs, they require you to pay for the appraisal as it happens. Since you’re paying a fee to a third party, it’s non-refundable whether you end up closing on the loan or not. Reali does, however, state that it only moves loans through that are likely to be able to successfully meet all underwriting standards.
Reali’s Mortgage Process
Reali’s mortgage process is quick, easy, and entirely digital. You’ll hear back within one business day with your loan decision, but can actually hear back in as quickly as one hour.
How do you begin a mortgage application?
To start off, you can fill out a short form to access a rate quote. From there, you can compare different mortgage rates and see how things change when you adjust variables like rate, term, and closing cost financing.
Since there are only conventional loans available, it’s fairly easy to compare apples to apples. You don’t have to figure minute detail changes across multiple loan types, rather see how specific things change the cost of your loan.
Once you review your options, you can decide whether or not to continue with your application. If you do, you’ll continue filling out information through Reali’s online portal.
At this point, you’ll also get a credit check performed for free. Your loan estimate and disclosures are then created and you can electronically sign everything for a completely digital process. You can also upload all of your supporting documents.
Reali allows you to track your loan progress online at any point; in fact, the entire process is completely digital, from start to finish.
After your application is underway, closing usually takes 30 days or less; however, you can contact Reali if you need a faster closing and it may be possible.
Following closing, Reali doesn’t service any home loans. But they do fully vet their servicers and give you all the right contact information when you loan funds. This isn’t unusual and doesn’t affect any of your loan terms, just where you send your payment.
There are a few features that make Reali stand apart from other online lenders. First, they offer a $500 refer-a-friend lender credit. This is an easy way to save some cash during the mortgage process.
On top of that, they offer a great resource called the Suggestion Engine. This online tool gives you real-time advice on how to get a better rate on your mortgage or refinance.
Reali is an ideal choice for tech-savvy borrowers who prefer to handle things solely online. As long as you live in a participating state and prefer a conventional loan, you can save time — and perhaps even money — by using this leading lender.