What Tomo does differently
For one thing, Tomo claims to be able to issue a mortgage preapproval within hours of receiving a buyer's application and guarantee that buyer will close on time through its Closing Guarantee program (regarding the mortgage portion anyway) as long as buyers schedule the closing at least 30 days out.
Tomo aims to get homebuyers from the mortgage application process to closing on the loan within 21 days -- during a time when the industry average is 47 days. Tomo can do this because of the technology it uses and the service it provides to each loan applicant.
For another thing, Tomo serves homebuyers only; it doesn't do refinances, which frees up a lot of time for this lender.
Tomo also says it will give applicants the best loan rate, and if it doesn't, its Price Match Guarantee program will match any better offers they might get.
Finally, Tomo aims to provide great customer service, pairing an applicant with a loan advisor who's local to the buyer's market -- an advisor who's available seven days a week through text, phone, email, or Zoom.
How Tomo compares with other lenders
With Tomo, homebuyers can apply for both 15- and 30-year fixed-rate conventional loans starting at $150,000. They can buy single-family detached homes, townhomes, condos, and buildings of up to four units.
What Tomo doesn't offer are FHA and VA loans, loans for manufactured or mobile homes, construction-only loans, co-ops, or jumbo loans.
The secret sauce
The secret sauce for Tomo, at least for this funding round, is founders Greg Schwartz and Carey Armstrong. Says Ribbit Capital's Nick Huber, who led the financing: "When we learned that the two of them were working together, we immediately knew that we had to be a part of the journey."
Huber added that he and his team believe Schwartz and Armstrong, because of their track record at Zillow, deeply understand buyers and have developed relationships in the industry -- think real estate agents, which Tomo calls Tomo Brokerage Partner Agents, a similar concept to the relationship Zillow has with agents through its Zillow Premier Agent program. Tomo encourages buyers to use Tomo agents by shaving off 0.125% of the loan rate if they do.
The Millionacres bottom line
Tomo currently operates in Dallas-Fort Worth, Houston, and Seattle. It's a digital mortgage lender focused on customer service. In fact, that's the reason for the name "Tomo," which comes from the Japanese concept of "omotenashi," which refers to anticipating and fulfilling people's needs in advance.
Tomo seems to be on the right track to make for a good real estate investment vehicle. Although it has lots of competition with the onset and popularity of digital mortgages, this one's worth watching.