Each month as part of StartHub Startups to Watch Program we connect with the winning company to learn more about them. Our September Startup to Watch is RateGravity, a software solution startup that enables residential lending from various lenders. Recently we had the pleasure of interviewing Patrick Boyaggi, Co-Founder & CEO, Founder of RateGravity. Here’s what we learned:
Tell us about your company. What is RateGravity?
Simply put, RateGravity is the best way for someone to get a mortgage. Our mission is to help home buyers with the most stressful and confusing part of the home buying process – finding and securing a mortgage.
We level the playing field by bringing the home buyer everything they need in one easy to use platform: technology to find the best rates, deep industry relationships to ensure those rates actually get honored, and compassionate customer service to buyers and real estate agents alike to deal with the stresses of this process.
We’ve helped hundreds of homebuyers save over $3M throughout the life of their mortgage, by offering customized loans that are 0.375% lower than the available market rate, and we’re just getting started. One of our internal goals is to save our customers $1B over the life of their mortgage. It’s a big task, but we are up to it, and it needs to be done.
What is your background? How did you come up with the idea for RateGravity?
Prior to RateGravity, I ran the residential lending business for a local community bank with my co-founder, Mike Tassone. During my five years there, our team closed more than $11B in mortgages and worked with more than 30,000 customers. Yet, when it came time for me to get a mortgage, I didn’t go to my own bank.
Instead, because I knew the system, I knew exactly how to figure out what I would be approved for and I went direct to the local lenders I knew offered the best rates and lowest fees. By doing so, I saved myself tens of thousands of dollars.
That’s when I realized that the only reason I could save and everyone else couldn’t was because I knew how to work the system and I had the relationships to make it happen.
It was a powerful moment. I realized what I did for myself was in fact, a prototype of RateGravity. As I approached others about using the same service, the response was resoundingly positive. I knew I was onto something, so Mike and I started the company.
Who is your target customer?
If you like Amazon Prime, we are likely your team. Amazon provides the lowest price most of the time. You can shop around and find cheaper retailers from time to time, but then you have other worries. Is it really the product? Will I get it? What is the return policy?
Like Amazon, we provide both technology to find you cost-savings, and built the infrastructure to provide you peace of mind. Not only do we usually have the lowest interest rate for our mortgages, but we also provide the technology to aid your product selection. Most importantly, we have built the infrastructure through our network of lenders to make sure that your loan will actually close, stress-free and much cheaper to boot.
How do you think RateGravity is going to disrupt the market? What are the main differentiators between you and your competitors?
RateGravity is the only company who can provide and end-to-end mortgage solution — best rate, best tech, best service, and hold your hand through the whole way.
Our technology lets us operate more efficiently, which allows us to charge our lenders lower fees than traditional brokers. As a result, we’ve pre-negotiated discounted terms so the savings get returned to the customer in the form of better interest rates and lower fees. To date, our customers are closing with interest rates .375% below the available market rate, which on average translates into $30,000 in savings over the life of the loan.
In addition to the cost advantage our tech provides, we built a network of local community lenders so consumers can see offers from banks, credit unions and mortgage companies that have been fully vetted by our industry experts. Our shop local approach means you secure financing from lenders that understand the markets they lend in and have a desire to lend in their community
Lastly, because we have a cost advantage (we charge our lenders a fee of 0.25% compared to traditional brokers who charge over 1.00%), we provide consumers with complete transparency into market rates by comparing our interest rates to the best national lenders, so they can be assured they are getting a fair deal. Because we are not beholden to any stakeholders, we can provide our customers with the unbiased personal advice they need to navigate this significant financial transaction. Our personal mortgage experts are with you until your close on your loan and move into your home.
Who are your main investors?
We raised money from Listen Ventures, Accomplice through the BOSS Syndicate and Angel Investors.
Why did you decide to start your business in Boston? How long has your company been around?
Boston is where the idea for RateGravity was formed and there was never any thought of building our company elsewhere. Boston has created an environment for people to turn their dreams into a reality and there are plenty of companies that serve as models for success.
Not only does Boston provide amazing resources to help you start a company, but the entire Commonwealth is full of savvy customers that are quick to recognize and adopt disruptive companies that create tremendous value. Moreover, Massachusetts is home to some of the best community lenders, which make up our lender network. Our “shop local” approach means you secure financing from lenders that understand the markets they lend in and have a desire to lend in their community.
What resources in the startup community have contributed to the success of RateGravity?
The startup community in Boston has been instrumental in helping RateGravity become what it is today. As former bankers, Mike and I were not familiar with all the startup community had to offer, but we learned very quickly that Boston has created an environment that is second to none. The people in this community embraced us and were influential in helping us to win MassChallenge and the Harvard Real Estate Venture Competition and to be selected to the Boston Techstars class of 2017.
Our involvement in these programs has led to recognition in publication such as the Boston Globe, BostInno and The Boston Business Journal.
Most importantly, though, the people in our community were our first customers and they have helped to spread the word and refer their friends, family and co-workers to get their mortgages through RateGravity. For our efforts, we’ve earned Net Promoter Score of 96 from our customers, which is unheard of in financial services (the top lenders in the US, have Net Promoter Scores in the single digits).
How do you use StartHub professionally?
StartHub is a great resource to learn about the startup community, to get notified about the events going on and to find jobs. I use StartHub to get caught up on news in the community and to find out about great new startups.
What are the next steps for RateGravity?
We are going to spend the next few months to further establish the Massachusetts market so we have a strong foothold before we expand into new markets and reach our goal of saving our customers over $1B. We have built an amazing team with technical and domain expertise and we look forward to adding to it by tapping into the rich and deep pool of talented engineers, marketers and operators.
What is the most important thing our readers should know about RateGravity?
We started this company because we give a damn. Since we came from the industry ourselves, we know that homebuyers have the deck stacked against them 9 times out of 10. We won’t sleep until it’s fair.
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