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Redfin Mortgages: Offerings, Rates, Pros and Cons

Have you heard of Redfin’s new mortgage options and felt curious about it? You already know that Redfin lists properties that are available for sale, but what else do they do? Discover their services, limitations, and the pros and cons of working with them today.
Have you heard of Redfin’s new mortgage options and felt curious about it? You already know that Redfin lists properties that are available for sale, but what else do they do? Discover their services, limitations, and the pros and cons of working with them today.

When you think of buying a home, you usually think about getting a mortgage from a bank or credit union. However, there are more and more online mortgage options available, and many of them offer unique features or especially quick processing.

If you’ve been researching alternative mortgage options, you may have heard of Redfin. But how do they stack up to using a traditional buyer’s agent to find and purchase a home? Find out more about what they offer, the rates they have, and the pros and cons of working with a company like Redfin.

What Does Redfin Offer?

Redfin has two primary services: helping you find a home and offering mortgages in specific states.

Finding a Home

Redfin functions largely as an online real estate portal, similar to Zillow or Trulia. However, they are also a broker, meaning that if you find a home you like they offer to help you make an offer and close the deal using their own realtors.

Part of what makes Redfin different than other realtors is that they offer to rebate part of the buyer’s commission to you. How much it is depends on the listing, and not all states allow rebates.

Unfortunately, Redfin’s service is only available in specific major markets, so you may be out of luck if you’re buying in a more rural area or the 10 or so states they don’t serve.

Mortgages

Beyond helping you find and buy a home, Redfin recently launched a mortgage service as well. It’s available in 12 states and Washington, D.C.

They aim to streamline homebuying by creating as much of a “one stop shop” as possible. In order to qualify for a Redfin mortgage, you have to use a Redfin realtor. However, those that use a Redfin realtor will still have the option to use another mortgage lender if they would like.

Redfin offers pre-approval, fairly competitive rates, and lower fees. They’re able to offer this because they automate and control the entire process, and are gaining from the fees and costs at every step. In addition, mortgage advisors are not paid based on the traditional commissions, but rather on reviews, similar to SoFi and Sindeo.

Understanding Redfin Mortgages

To dive more deeply into Redfin’s mortgage operation, let’s look at the specifics of what they offer. You can only get a Redfin mortgage if you work with a Redfin buyer’s agent and are purchasing in Colorado, Florida, Georgia, Illinois, Maryland, Minnesota, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, and Washington D.C.

Redfin only offers 30-year fixed, 15-year fixed, and 5/1 ARM mortgages. They promise transparent pricing so that there are no surprises or extra fees at closing.

They offer a fast pre-approval where, once you submit required documents, they will get you a pre-approval within 90 minutes during business hours. This comes with a 30-day closing guarantee, where they guarantee the mortgage will close in that amount of time or they will give you $1,000 toward closing costs. There is also a more traditional pre-approval that comes with a 25-day closing guarantee.

The rates vary depending on the zip code where you’re interested in buying, the price of the home, your down payment amount, and your credit score.

As an example, if you’re buying a $250,000 home in Tampa, Florida and are putting 20% down with a credit score between 720-739, you’ll have an estimated rate of 4.125% on a 30-year fixed mortgage or 3.5% on a 15-year fixed.

This is competitive based on other offers in the same zip code (33605) and is slightly higher than the Florida state average rates.

Pros and Cons to Working With Redfin Mortgages

What are the benefits and drawbacks to working with Redfin for their mortgage product?

The most obvious benefit is that if you’re planning to work with a Redfin agent anyway, you can get competitive rates that are on par with other lenders. You can also get rebates toward closing costs in states that allow them. The process may be faster and simpler because it’s all handled by one company

However, you’re going to be doing the home-searching legwork on your own. They’re charging a fairly high buyer’s agent fee (even with the discount) considering they aren’t giving you a full-service experience. You’re going to find the home you want on your own using their online tools, and then their agent will help you close.

Why do all the work on your own without any personalized help? When you work with a Clever Partner Agent, you get a top-rated buyer’s agent who gives you local full-service assistance finding and buying the right home. These realtors and live and work in your community. Clever Partner Agents are active in markets across the U.S., not in limited metro areas.

Even better, you can get $1,000 toward closing costs (in states that allow it) for homes that are $150,000 or more. You get a rebate and a full-service realtor that helps you view homes as soon as they hit the MLS — not days later when thousands have already seen the same listing.

Redfin mortgages are competitive, but they aren’t head and shoulders above other options. There’s no reason to be limited to an expensive do-it-yourself experience. Contact Clever today!

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