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Historically, acquiring a home through financing has been a complex process worldwide. However, in the last few decades in the United States, this process has shifted towards greater transparency and digitalization. Companies like Rocket Mortgage, Better.com, and Loan Depot have leveraged this trend to enhance the accessibility and efficiency of obtaining home mortgages.
This modernization and streamlining of the home financing process have now started to take hold in Mexico as well.
Enter Kredi. Kredi's mission is simple.
To make applying and obtaining a mortgage easier and more equitable for people in Latin America.
The founders of Kredi understood the struggles firsthand. They had all dealt with the complex system, the endless paperwork, and the feeling of being shut out of their dream of homeownership. So, they decided to build Kredi to change things.
“We started with Kredi when the world was starting to paralyze and “uncertainty” (Covid 19 pandemic) was the word on everyone’s lips. However, despite all that, we decided to continue with the creation of a marketplace specifically designed for mortgage loans, which allowed people to get the best credit possible,” Javier Aldape told Forbes Mexico.
The Challenge
In Mexico, the mortgage market is controlled by a group of 3 to 5 institutions that originate the majority of residential mortgages. This concentration of market power results in minimal incentive to innovate or modernize the lending process and criteria. As a result, customers often face a lack of transparency during the mortgage application process, leaving them unclear on the qualifications needed or the reasons for mortgage financing denial. Furthermore, the absence of a loan guarantor similar to "Fannie Mae" in the United States makes it challenging for new entrants to penetrate the market, solidifying the established positions of current market leaders.
The Solution
Kredi's platform allows borrowers to compare offers from multiple lenders and to apply for a mortgage online. The company's platform helps to streamline the origination process, which can take up to 14 weeks with traditional banks. Kredi has been able to reduce the origination time to 3 weeks, with that goal to eventually reduce it to 1 week.
“Contrary to traditional banks, in Kredi customers can easily apply only and secure a mortgage rate in minutes. We use advanced underwriting models that allow us to seed the process and mitigate risk.” - Javier Aldape
