Lenda is a much newer mortgage lender that's seen rapid growth from its base in California. Its online-only system of providing mortgages may be faster and more convenient for receptive users, but we found that it doesn't necessarily save borrowers money when compared to more established lenders.
- Lenda Review: A Faster, More Transparent Mortgage
- How Do Lenda Mortgages Compare?
- Customer Service and Mortgage Servicing
- Mortgage Loan Products at Lenda
- Where Can You Get a Mortgage With Lenda?
Lenda Review: A Faster, More Transparent Mortgage
Lenda grants borrowers speedier approval and access to better technology, although users who prefer the brick-and-mortar experience may be discouraged by the company's online-only origination process. Lenda focuses its efforts on sharing as much information as possible with customers during the process of obtaining a home loan. As a new homebuyer, you can expect Lenda to provide consultation and support on what you hope to achieve through your mortgage.
Because Lenda chooses to focus on building a supportive, in-depth origination process, it does rely on partner companies to handle the servicing of your home loan. While this means your monthly payments will be handled by another company, Lenda only works with servicing companies that are able to provide online tracking and automatic payments through their own websites.
Lenda is only available in a handful of West Coast states, with recent expansion into Texas and Colorado. Moreover, you won't find anything other than fixed-rate conventional and jumbo loans with Lenda: the company has yet to add government-backed loans or adjustable-rate options.
How Do Lenda Mortgages Compare?
Lenda's sophisticated online-only mortgage process may give users a more convenient experience, but its rates and closing costs don't stack up well against large traditional lenders such as Wells Fargo. Lenda doesn't charge an origination fee, but the cost of buying down its interest rate tended to cancel out those savings in our estimates.
30-Year Fixed Rate Mortgage Estimates
|Lenda||Bank of America||Chase||Wells Fargo|
Estimates for a $200,000 purchase price with 10% down payment and credit score of 740
Even with discount points included to lower the interest rate, Lenda's strongest offer for a 30-year mortgage fell short of estimates that we received from major banks. The company's nominal rate and APR were both no better than average, with the big banks providing better numbers in more than one instance. As for upfront fees, Lenda gives borrowers great savings in origination and title insurance. However, those savings are canceled out by the added expense of discount points.
Major Closing Costs by Company
|Lenda||Bank of America||Chase||Wells Fargo|
|Total with Points||$4,853||$8,984||$1,800||$2,344|
On the bright side, Lenda does a better job with its website and online tools than other mortgage lenders. Its rate and fee information is very detailed and likely more accurate to your real situation than other lender tools. Although you do have to create an account with Lenda using your email address, signing in lets you pre-qualify for a home loan and see estimates based on your purchase price or current mortgage balance. The online quote tool also gives you a convenient slider to see how adding or removing discount points affects your scenario, a feature that's often missing on other lender websites.
Customer Service and Mortgage Servicing
We recommend using Lenda for your mortgage if you need to fund your home purchase as soon as possible. You'll also need to be comfortable relying on Lenda's online-only method of processing loans, which grants you anytime access to the application and consistent support from a dedicated representative. However, more traditional consumers who prefer to keep records on paper and do business in person won't find those options here.
Mortgage-Related Complaints at Major Banks, 2013-2017
|Company||Mortgage Originations||CFPB Complaints||Ratio||2017 JD Power Rating|
|Bank of America||1,172,113||28,187||2.40%||767|
While we usually begin our review of a lender's customer service by comparing its total loan volume against the number of public complaints against it, Lenda's partnership with servicing companies means that the quality of your experience after the initial loan process will depend on those partners. On the other hand, it's easier to see the high quality of Lenda's origination services.
Once you log into Lenda's website and provide the information needed for a credit inquiry, you can quickly obtain a full estimate of your rates and costs. Not only is Lenda's estimate much faster, it also goes into your potential loan fees in much greater detail than you may see in competitor estimates. While this can lead to a higher estimate at first glance, Lenda's stated goal of achieving greater transparency means that it's simply letting you know about such costs up front. Other lenders often choose to withhold such information until you've already invested time and effort into applying.
Home Loan Products at Lenda
Lenda's mortgage products aren't terribly diverse, covering only conventional fixed rate loans for purchase and refinancing. Plugging in different loan amounts showed that it won't finance jumbo loans, so you'll need to look elsewhere if you're borrowing more than your local loan limit. Lenda also lacks government-backed mortgages like FHA and VA loans.
Lenda Purchase Mortgage Rates
|Mortgage Product||Interest Rate||APR||Points|
|30-year fixed rate||4.13%||4.22%||0.81|
|20-year fixed rate||4.00%||4.13%||0.74|
|15-year fixed rate||3.50%||3.62%||0.45|
|10-year fixed rate||3.38%||3.52%||0.31|
Estimates for a $200,000 purchase loan with 10% down and credit score of 740
These mortgage rates represent Lenda's lowest offer for the numbers we provided, which means that they also include the highest number of discount points. One point costs 1% of the loan balance, adding $500 to $1,500 to the closing costs for a $180,000 loan with Lenda. This added expense cuts into the lower closing costs that are supposed to be one of Lenda's major advantages over a traditional lender. Although you can choose to take fewer points and reduce your upfront payment, this will obviously raise your interest rate.
As for refinancing options, we were only able to see options for a fixed rate 10-year term. Considering most borrowers look to refinance within the first 5 to 7 years of a 30-year mortgage, refinancing into a 10-year loan comes with a big jump in monthly payments. While we often find that a lender is more willing to negotiate such details over the phone, Lenda's online-only system makes it less likely that you'll see such flexibility here. With its emphasis on keeping the entire loan process fast and human-free, Lenda may actually limit its refinance products to the 10-year term.
Where Can You Get a Mortgage With Lenda?
Since its founding in 2014, Lenda has kept its mortgage business focused on the West Coast. Most recently, the company has obtained licenses to provide home loans in Colorado and Texas, with plans to expand into eight additional states by early 2018.
States Where Lenda Operates
How Does Lenda Compare to Today's Mortgage Rates?
If you want to get a sense of estimates from other lenders compared to Lenda's rates, see the table below to explore today's mortgage rates.
Rates assume a home purchase of $200,000 in New York with a 20% down payment and credit score of 740. Estimates include origination fees and points but don't include other closing costs.