Low rates and fees
Reali’s mortgage interest rates are very competitive. There is no application fee or origination fee.
You can buy mortgage discount points to lower the interest rate for the life of your loan. (Mortgage discount points are interest that you pay upfront in exchange for a lower interest rate.) Or, if you take a slightly higher rate, Reali gives you a lender credit to help with other closing costs.
There are fees for some of the special real estate services (see below).
Special programs to help you land a home in a competitive market
In California, Reali offers a couple of interesting home-buying programs to help you win out as a buyer and transition from your old home more smoothly.
The trade-in program is an alternative to a bridge loan (a loan that helps you buy a new home before your old home sells). With this program, Reali buys your new home for you. Once you move in, Reali cleans, preps, and stages your old home, then sells it. After it sells, you use the proceeds to buy your new home from Reali at the price Reali paid.
There is a fee for this service. At 5%, it’s comparable to what you might pay another agent to sell your old home and represent you in the purchase of your new home. Also, you pay rent to Reali on the new home until your purchase transaction is complete.
With this option, there are three separate loan transactions:
- Reali purchases your new home
- You sell your old home
- You buy your new home from Reali
Each of these transactions has closing costs. Reali charges very low fees and offers some cash rebates, so those benefits should defray the total cost. It’s not clear from the website whether the fee for the service covers any of the closing costs.
The cash-offer program works similarly. In order to help you win in bidding for a home, Reali makes an all-cash offer (with no financing contingency) on the home you want. If the seller selects Reali’s offer, Reali buys the home. Once the transaction is complete, you buy the home from Reali at the price Reali paid.
There is no additional fee for the cash-offer program once you are pre-approved. And again, multiple transactions are required, each with potential closing costs.
Cash back option
You may get additional cash back if you use Reali’s real estate brokerage services. If you work with Reali’s real estate agent, Reali gives you cash back equal to 1% of the purchase price. Usually, 2%-3% goes to the buyer’s agent, but Reali accepts a lower commission in order to share it with the customer.
You can apply and track your mortgage application online. Reali offers a fully remote loan closing where the law allows it.
Transparent mortgage interest rates
Reali publishes its rates online. Even better, you can play around with the numbers on Reali’s website to see how your credit score, down payment, and other variables affect your rate. Reali displays a range of results that illustrate the different levels of upfront costs. You’ll easily see how you can save money on closing costs by taking a higher rate, or save on interest charges long term by paying for points.
What could be improved
Reali is currently licensed to make mortgage loans in 14 states: Arizona, California, Colorado, Florida, Georgia, Illinois, Maryland, Michigan, Oregon, Pennsylvania, Tennessee, Texas, Virginia, and Washington.
Reali’s real estate brokerage services are only available in California.
Limited loan options
The options are slim here. Reali currently only offers conventional fixed-rate mortgage loans (purchase and refinance). These can be conforming loans or jumbo loans.
Reali plans to introduce FHA and VA loans in 2022, which will make Reali’s bundled home-buying services available to a much bigger group of potential applicants.
If you need any kind of mortgage that is not run of the mill, consider looking elsewhere for now. Borrowers in need of non-standard mortgage types might include self-employed borrowers, foreign nationals, borrowers with lower credit scores, medical professionals looking for doctor loans, and so on.
Reali is not for everyone. It uses data and artificial intelligence more than warm bodies. Reali doesn’t have a huge team of agents. Even in California, where they offer brokerage services, much of the state is out of their agents’ service areas. Where they do have agents, a small number of people cover huge swaths of geography. If you are more comfortable with a neighborhood expert and some hand-holding, you might not enjoy working with Reali.