HOMEBUYING HELP
Biz gives mortgage shoppers a foot in the door
Buying a home is one of the biggest purchases people will ever make, but many stop shopping around once they have an agreement for the home of their dreams. A Boston startup is trying to keep the door open by giving homebuyers access to a range of mortgage lenders all vying for the customer’s business.
“There’s a real void in the market and the opportunity to do something,” said Patrick Boyaggi, chief executive and co-founder of RateGravity. “The mortgage broker has access to all this information that the consumer doesn’t know.”
Boyaggi led a community bank’s mortgage lending business for years, and was responsible for more than $11 billion in mortgage transactions. But when it was time for him to buy a home, Boyaggi used his insider information to get the best deal possible from another bank.
“Just because I was an insider, I basically got myself preferential terms. I said ‘I should make this available to everybody,’ ” Boyaggi said. “The industry is too opaque, and there’s an asymmetry of information. We could use that to empower consumers with knowledge and transparency.”
RateGravity uses an online matchmaking system to connect homebuyers to lenders that specialize in condos or single-family homes or whatever a user’s home of the future is. Then a group of lenders bid for the right to offer a mortgage — a dramatic power swing.
RateGravity uses local lenders who are in tune with the local real estate market and goals of residents.
“On average, our borrowers have been closing with interest rates that are between a quarter and threeeighths below the market rate,” Boyaggi said. “Customers save $29,000 on average over the life of their loan.” Since the company’s creation a few years ago, RateGravity has worked with “thousands” of customers in Massachusetts, Boyaggi said, and helped broker mortgages worth a combined hundreds of millions of dollars. Boyaggi declined to disclose any revenue figures, but said the company is paid 0.25 percent of a loan when it closes. If the company has completed $100 million in mortgages, its revenue would be $250,000. If RateGravity has brokered $500 million in mortgages, the company’s revenue would be $1,250,000 million.
Boyaggi — who co-founded the company with Mike Tassone, another bank executive — said he got his fair share of people skeptical about his plan to take on an industry as entrenched as the mortgage business.
“There’s some days where you feel like you’re on top of the world and there’s other days when you’re up for 18 hours, but that’s the journey for an entrepreneur,” he said. “We’re helping save people money in what’s likely the biggest transaction of their lives. Those wins, those highs, can’t be replaced any other way.”