The numbers are staggering. According to research done by the University of Chicago, an estimated 20% of American households are losing an average of $45,473 by not refinancing their mortgages with some missing out on upwards of $150,000!
“People avoid refinancing because they believe the time, money, and other resources it requires aren’t worth what they’ll get in return” says Jason van den Brand, the CEO and Co-Founder of Lenda, an online-mortgage startup. “They see a process that’s full of red tape, stacks of paperwork and telemarketing and understandably try to avoid it.”
There is a common perception that the home refinancing process is complicated and expensive, a perception that isn’t entirely untrue. Also, because the money refinancing saves an individual must accrue over time, it requires delayed gratification, which we all know can be challenging. Finally, there’s a certain amount of skepticism around the process as people believe the large sums of money they’re told they could save is too good to be true.
“It’s much easier to think of reasons not to refinance than it is to think of reasons to refinance,” says van den Brand. “But the amazing stories of individuals who choose to go through it can be very powerful to hear.”
For example, there was the Furer family who chose to refinance their home in 2014 in order to help their son Erik pay off over $200,000 in student loan debt. “The hardest thing was probably making the decision to do it,” Erik’s father Hans told Business Insider.
Kevin Wofsy of San Francisco refinanced his mortgage using Lenda after getting the run around from Wells Fargo.
“Wells Fargo sent me information on refinancing and said that it would be as easy as 1-2-3,” says Wofsy. “That couldn’t have been further from the truth!” Wofsy went on to say that he was turned away from refinancing his mortgage after 8 weeks of back and forth and a ton of documentation because he didn’t meet “eligibility requirements they should have known about during the first conversation.”
“The bank could have told me upfront that I wouldn’t be able to refinance using the program they advertised, but they didn’t,” Wofsy said. “When I used Lenda they were very up front about everything and reassured me that I could refinance to the loan I wanted. I finally feel that I got my ‘forever loan’ from Lenda.”
Both the Furer’s and Wofsy used online-mortgage startup Lenda in order to refinance their homes. Lenda eliminates much of the complication and expense of traditional mortgage brokers by automating and streamlining the entire process, all the way from getting a quote to closing your loan.
“We looked at a broken process and created a way to do it better,” says van den Brand. “We were able to eliminate a lot of the hassle that comes with refinancing a mortgage and it’s going to save people tons of time and money.”
According to their site, Lenda saves their clients an average of $8,000 in closing costs and fees as well as a month and a half of processing time. Since Lenda provides a self-directed mortgage experience online, homeowners can see the loan programs available to them in real time and complete the entire application in minutes. Check out their website and get a quote here.