Is a Zil-Loan in Your Future?

April 3rd, 2008

The real estate blogosphere is pretty well awash with today’s announcement of Zillow.com’s Mortgage Marketplace, but it may take some time to filter down to the home-shopping consumer. Here’s a quick overview…

You remember Zillow.com, the glossy property valuation site for real estate voyeurs–type in an address, get a Zestimated property value, snoop on neighbor’s houses, and wallow in maps, neighborhood data, etc.

Pretty entertaining, particularly where it came to how Zillow calculated home values (often wildly). They took their early lumps but have gained more market information and improved their methodology to the point now where you can make some broad judgments based on their site’s findings.

But the Mortgage Marketplace potentially offers much more value to the consumer. This service will allow you to anonymously shop for mortgages (for free) from an unlimited number of registered lenders. You can contact the lenders of choice when you’re ready to take your due diligence to the next level.

You can shop for a primary mortgage or home equity line of credit (HELOC). All loan fees will be disclosed upfront. Lenders that don’t perform well get scored as such (ala eBay or Angie’s List). Zillow brings new transparency to what has been a high-pressure, high-stakes part of the home-buying experience.

They’ve done their homework. From the CEO’s blog post:

At Zillow we believe in information transparency. We believe informed consumers are empowered consumers. We believe these informed consumers make better customers for real estate professionals. We believe consumers should be able to shop anonymously, so that they are not approached by a salesperson until they ask for assistance. Finally, we believe in open and free marketplaces.

Borrowers have told us via focus groups and surveys that they spend woefully little time shopping for the mortgage they have – 5 hours. About the same amount of time they spent buying their last computer and nearly half the time they spent shopping for their last car. They also tell us that they want their personal contact information to remain private and that they want to see real rates that are accessible to them, not “teaser” rates that don’t reflect reality. They would also like to shop across their options and be able to do an apples-to-apples comparison of loan quotes from multiple lenders in a standard format. Finally, they’d like to be able to understand the reputation of the broker or lender as seen from the perspective of other borrowers, much like they can judge a seller’s reputation on eBay or a hotel’s reputation on TripAdvisor.

If you’ve tried getting mortgage advice or loan bids through LendingTree and others of their ilk, you probably know what Rich Barton is talking about. And it’s probably why people spend so little time evaluating the financing side of a home purchase. Check it out here.

I’m curious to hear if any of you try the service and what your reactions are. Also, if any loan officers are reading, what is your take? Will you participate?

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Related posts:

1. The 7 Don’ts of Obtaining a Home Loan
2. More Loan Options for Homebuyers – Fannie Mae/Freddie Mac raise loan limits
3. FHA Loan Amounts Increase In Portland

Entry Filed under: Mortgages, National News