Buying a home is a daunting process. Lending agents dive into personal financial history, often leaving potential buyers feeling overwhelmed and dejected. Home Lending Pal is setting out to change that, by allowing consumers to simulate the underwriting process to determine home loan affordability before connecting with an in-person lender. The mortgage research software also educates potential homeowners about the ins and outs of buying a home. Grit Daily caught up with co-founder and CEO Bryan Young to discuss the new software and how he hopes it will change home buying for Americans, and put an end to redlining and predatory lending.
Home Lending Pal seeks to educate consumers about what data points lenders are looking at when determining a person’s loan eligibility. Young says, “We wanted to create a system that would be for the people and really highlight some of the concerns that may cause frustrations after you become a homeowner.”
The Gig Economy
More and more people in the economy are relying on gig work. Even jobs that were traditionally done by full time workers with benefits are now being contracted out so that businesses do not have to pay taxes on behalf of, or provide benefits to, those who work for them. That makes it harder to prove consistent finances to quality for homeownership. Young believes that the employment crisis brought on by COVID-19 will force lending agencies to rewrite the rules of eligibility to include alternative income streams.
According to Young, rent is going up 3%, on average, across the country, but even though people are paying higher rental costs, they still may not qualify for a home loan. He says, “You’re seeing Millennials that are paying these higher rent expenses, yet they’re not qualifying homeownership because they don’t meet the traditional guidelines that are necessary for underwriting when it comes to homeownership.” He hopes to work with credit bureaus in the future to provide alternative loan offers.
Beta Tests, Security and Projecting Costs
Home Lending Pal has been tested by thousands of consumers to make sure users can search using particular parameters, including zip code, school rank and nearby entertainment options. The software boasts bank level security, and goes further by using blockchain technology for document management.
Home Lending Pal is committed to showing consumers the total cost of home ownership, including the unforeseen. Young says, “We’re integrating APIs that will let you see things like property taxes, insurance, even expected maintenance costs, as well as commuting expenses such as gas, car maintenance, etc. We’re really trying to give the borrower a much better understanding of how homeownership will impact them from a financial perspective.”
Both founders come from diverse communities, so BIPOC inclusion hits close to home. They plan to give back 2% of their profits to the communities that helped them rise to success. They want to change entire communities through intelligent lending.
In today’s world, people can make major purchases like cars online, comparing costs throughout the process. Home buying has not caught up yet, but Home Lending Pal may be a start, by providing transparency, education and guidance throughout the process.