On June 30th, 2021, Tomo Mortgage opened for business. We knew that the mortgage industry was broken, and from day one we set out to fix it—to radically reduce the cost of buying a home.
We knew that if we could offer the lowest mortgage rates in America and real guidance on when and what to buy, we could help millions of Americans get on the wealth-building ladder of home ownership. So, as we celebrate our third anniversary, we wanted to reflect on the first thousand homebuyers we’ve had the privilege to serve and what we’ve learned about breaking some industry conventions along the way.
We have a lot to be proud of…
We’ve saved people about $2 million in lending fees alone. We automate so much of the needless back-and-forth in underwriting, which allows us to do in one week what takes other lenders over a month. It’s no wonder that we’re able to close on-time 98% of the time, while the rest of the industry considers 40% good enough.
And, people tend to like it when you make things faster, easier, and less expensive. Our Net Promoter Score (NPS), which measures customer satisfaction by asking people how likely they are to recommend their lender, has put industry benchmarks to shame. We even topped Rocket Mortgage’s “record high” they bragged about last year every single month.
We have a lot of work to do
The American Dream thrives on the idea: work hard, secure good jobs, and buy a starter home to build a better life for our families. Homeownership is a cornerstone of wealth creation, a vital step on the ladder to financial security. At Tomo, we call this the Real Estate Wealth-Building Ladder. It starts with that first home, often secured with a federally supported mortgage.
Here’s the thing: it is still too hard to buy a home today, putting an entire generation at risk. At risk of not owning a home, but also being unable to save for things like their children’s college or retirement, as housing costs continue to skyrocket at a pace incomes can’t keep up with.
When it comes down to it, the #1 thing keeping people from buying a home is not the mortgage itself, but the down payment and closing costs (including the steep origination fees other lenders routinely charge, simply because they can get away with it).
Say you live in Seattle, for example, and make $116,000 (the median household income, per 2022 census data) and want to buy a home for $885,000 (the median home sale price). You decide to start saving aggressively—10% of your after-tax income—to make a 10% down payment as soon as possible. Now, let’s assume you do great at your job and get a 3% raise every year, and get 5% on your savings through savvy investments (vs. stashing it in a bank account)—how long would it take you to cover that down payment? How about 234 months! That’s nearly 20 years of saving everything you can to get to that down payment. And the result is living your entire adult life without a home of your own.
And, for the person who bought a home (maybe they got a gift from a family member to cover the down payment), they saw their home value increase $1.3 million during that same time frame.
Our commitment to change
With all that up against someone, the last thing they need is a lender trying to squeeze every penny out of them. And this is where I’m going to say something that the rest of the industry is not going to like: our job is to help people buy a home, and that means making it possible to buy a home. That’s it.
A lot of the people here at Tomo are here because they were tired of what they saw and lived with at other lenders. Darrell, our head of underwriting, put it this way: “Tomo has learned that many lenders don’t care about the customer; they just care about the money. They prey on customers, especially first-time homebuyers, who don’t know the process.”
People deserve better. Like the first-time buyer who was quoted a higher rate by a different lender. Our loan officer took a look at their situation and recommended they pay off some student loans to increase their credit score, so that we were able to offer them a lower rate. But we didn’t stop there; we dug into their mortgage insurance and saved them 32% on their monthly mortgage insurance on top of the interest rate savings.
Our work is far from over. The issues creating an unfair market have only worsened since we began. As we look ahead to the next three years, our mission remains clear: to make homeownership a reality for an entire generation and ensure the American dream continues to thrive.
If you’re ready to start your journey to homeownership, get pre approved with Tomo Mortgage today.