All June long we’re going deeper on mortgage and title — looking at where the mortgage market is headed, how products are evolving and alternative financing options changing the game. Join us for Mortgage and Alternative Financing Month. And subscribe to Inman’s Extra Credit for weekly updates all year long.
Tomo, the fintech launched last year by former Zillow executives with a focus on purchase mortgages, is now offering to let homebuyers lock in a rate for up to 120 days — before they even know the address of the property they want to buy.
“Homebuyers have struggled in a volatile housing market throughout the pandemic and rising mortgage rates will make things even more difficult,” said Tomo CEO and Co-Founder Greg Schwartz, in a statement. “We’re thrilled to launch our Lock and Shop product at the ideal time — homebuyers can enjoy the peace of mind that their mortgage rate is protected and taken care of, so they can focus on the most important decision of finding the home right for them.”
Homebuyers can choose either a 90- or 120-day rate lock, but as is typically the case when locking rates with a lender, Tomo’s Lock and Shop service is not free, and the $750 fee is nonrefundable.
Homebuyers can recoup the $750 fee by combining Lock and Shop with Tomo’s agent matching program, Tomo Perks. When homebuyers work with Tomo Brokerage partner agents and close their loan with Tomo Mortgage, they’re eligible for a $750 lender credit that’s deducted from closing costs.
Tomo’s Lock and Shop can also be combined with Tomo’s referral program, Friends of Tomo. Homebuyers must provide their Friends of Tomo referral link to Tomo before locking their interest rate to receive a $750 lender credit.
To qualify for Tomo’s Lock and Shop, homebuyers must be represented by an agent, and Tomo must receive a fully-signed purchase contract at least 30 days before the rate lock expires. Once under contract to purchase a home, homebuyers can float down their interest rate if lower interest rates become available. But the new interest rate must be at least 0.125 percentage points lower than the locked rate, and they can only float down once during the rate lock period.
Lock and Shop isn’t available for homebuyers taking out jumbo, HomeReady or HomePossible mortgages, and Lock and Shop can’t be combined with Tomo’s Price Match guarantee.
Austin, Texas-based Tomo Mortgage LLC currently offers loans in Colorado, Connecticut, Florida, Georgia, Michigan, North Carolina, Ohio, Texas and Washington.
Although Tomo Mortgage is also licensed in Washington D.C., Illinois, Maryland, Oregon, Pennsylvania, South Carolina and Tennessee, Schwartz said Tomo was temporarily postponing plans to expand into additional markets, when the company announced layoffs of nearly one-third of its workforce on May 31.
Parent company Tomo Networks Inc., which announced a $40 million Series A funding round in March that more than doubled its valuation to $640 million, also owns Tomo Brokerage Inc., a Seattle-based real estate brokerage that facilitates Tomo’s referral business. In addition to its home state of Washington, Tomo Brokerage is also licensed in Texas, Florida, Georgia and North Carolina.