Fintech is changing the way we do many things such as banking, making payments, and even investing. But will it affect the real estate market? With real estate transactions being much larger than most other transactions that fintech handles – can it change the way we handle real estate?
It might, here’s how.
Faster Loan Processing
Loan processing is the one thing that could stand in the way of most real estate transactions. The weeks (or months) of waiting for approval felt like a lifetime and many transactions would fall apart at the last minute.
Fintech makes it easier to get approvals faster, getting buyers and sellers to the closing table even faster. With faster approvals, streamlined documentation requirements, and everything handled in the cloud – everyone is on the same page and able to process loans much faster.
Help Buyers become more Attractive
Buyers don’t need perfect credit to buy a home, but they must prove they are a good risk. Without great credit, buyers had to go back to the drawing board to figure out how they could get approved. Many fintech programmes make it not only easier but automated to fix credit and/or finances to make them a better applicant, increasing the potential real estate sales.
Reduce Mortgage-Related Costs
Closing costs are one of the heftiest parts of buying a home. Not only do borrowers have to save for a down payment, but they need 2 – 5% of their loan for closing costs. For many this was unaffordable. Fintech helps streamline the process, which cuts down the lender’s and third-party costs, making it more affordable for buyers to buy their dream home.
The Way you Buy Homes May Change
With big names like Zillow buying homes and selling them to their target audience, you’ll see less interaction with real estate agents and more buying homes from a computer program. Many buyers will buy a home sight unseen other than what they see online. With virtual reality and 3D tours available today, buyers feel as if they’ve seen the property even though they’ve never physically step foot in it.
More Financing Options
Finally, fintech makes financing more feasible for many borrowers. You don’t have to go to your traditional bank any longer. You can find financing via a variety of different lending options including peer-to-peer lending all done online without seeing any ‘banker’ or loan officer in person.
Fintech is changing the way we do just about everything today and that slowly means real estate too. Fintech makes buying real estate more feasible for those who otherwise wouldn’t be a good candidate. It may also make buying real estate more affordable and efficient, ensuring that everyone can make their real estate transactions while keeping money in their pockets and their sanity with them, even though buying real estate is one of the largest transactions you’ll make in your lifetime.