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In a signal that it remains focused on growing its mortgage business, Zillow announced on Tuesday that it had released a new feature it says will help buyers filter out homes they can’t actually afford to buy.
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Zillow Home Loans created the so-called BuyAbility tool to give homeshoppers real-time estimates that are tailored to their realistic budgeting needs.
“Instead of wasting time on homes they can’t afford, shoppers can now clearly and quickly identify homes on Zillow within their true budget,” the company said in a news release.
The company noted that buyers with higher or lower credit scores and debt-to-income ratios would qualify for different mortgage rates, impacting the size of the mortgage they qualify for and, ultimately, the homes they could afford to buy.
The company said the tool would help shoppers at a time when fluctuations in mortgage rates have resulted in swings around what buyers could afford from week to week.
“Mortgage rates have been on a wild ride this year,” Orphe Divounguy, a senior economist for Zillow Home Loans, said in a statement. “With improving inflation numbers and more balanced economic activity, mortgage rates could ease slightly heading into the new year.”
“That will mean more affordability and more options for home shoppers,” Divounguy said. “Buyers will be in a stronger position to act quickly when the right home enters their BuyAbility, bringing them one step closer to the American Dream of homeownership.”
The new feature also comes as Zillow looks to grow the mortgage side of its business.
The BuyAbility tool is accessed through the Home Loans tab on Zillow’s app, where users are prompted to input the state they’re looking to buy in, their gross annual income, credit score range, total monthly debt, down payment amount and the monthly payment they’re comfortable with.
The app then shows them both the maximum loan amount they might qualify for along with a suggested purchase price based on the monthly payment the buyer said they were comfortable with.
Zillow will then tag homes that are and are not within the user’s so-called BuyAbility while they browse the app.
Zillow launched the new feature on its app in all states except New York, with plans to add it to its desktop site soon.
