Opendoor Expands into Mortgage Lending
Online direct home buying company Opendoor has launched its latest venture, mortgages. Having played in the shallow end of the mortgage lending pool, Opendoor is jumping into the deep end. Opendoor Home Loans was announced Thursday, most likely to tap into a market that competitors like Zillow and Redfin are already in. As of now, the mortgage division is available in Texas and Arizona. The company plans to expand to other markets soon.
Opendoor’s motto as a direct home buyer allows sellers to sell their home directly to Opendoor, receiving a cash offer and picking their own closing date. Once closed, Opendoor would make some upgrades and improvements to the homes and then sell them in the open market.
Opendoor has actually been in the mortgage business, quietly, for the last two years. They took this time to build this side of the company, learning directly from the experiences of their buyers. This time, however, the mortgage business will not be limited to those who buy a home from Opendoor. And those who are purchasing an Opendoor home will not be required to use Opendoor Home Loans.
This additional sector of the real estate industry that Opendoor is in is just another way for them to be fully encompassed in the industry. Opendoor currently works directly with preferred title companies, allowing buyers a “one stop shop” for all things homebuying.
Opendoor Home Loans is offering their buyers competitive rates and numerous credits for using them. Credits include no lender fees, credits towards the buyer’s closing costs, and even a per diem credit of $100 if the home doesn’t close on time – as part of their “guaranteed on-time close” promise. Currently, they offer conventional and adjustable mortgages ranging from 10 to 30 years. They are not offering FHA or VA loans.
This latest announcement by Opendoor certainly tells the real estate industry that they are here to stay – and informing rivals that they are a force to be reckoned with. Its goal is to disrupt the conventional home buying and selling process. This is something Opendoor has in common with their rivals. The idea of iBuying is becoming more common and is popping up in more markets.