More People Turning to Online Mortgage Loans- Should You Too?

More People Turning to Online Mortgage Loans-Should You Too- 150x150You can buy almost anything online nowadays, so why not a mortgage as well? More and more home buyers are choosing to find a mortgage loan online instead of going around town and talking to lenders. Applying for a mortgage loan online seems to be significantly easier than doing it the old fashioned way, but you may be wondering what else it involves.

The biggest benefit of finding a mortgage loan online is convenience. You can get mortgage loan quotes and other information from multiple lenders in only minutes, without having to visit each of them individually, which would probably take up a lot more of your time. Applying for a mortgage loan online is even better than doing it by phone- no waiting on hold for a long time and being transferred several times until you find the person who can help you.

Finding Online Mortgage Companies

Many lenders are offering online mortgages, but they all have different rules which can be to your advantage or disadvantage. Some online mortgage lenders are banks and credit unions, which are the ones issuing and approving the mortgage loan. They can inform you of the interest rate that you qualify for, present you with your loan options, and answer all of your questions related to the mortgage. Applying with this type of lender can be very beneficial because most of your questions will be answered directly by the lender. However, in order to get the best deal, you will still have to shop around, speak with multiple lenders, and research all of the loan options that they are offering.

Another option when looking for an online mortgage is to speak with a mortgage broker, which will act as an intermediary between you and a lender. After you give them all of the necessary info, they will try to find the lender that offers the best possible interest rate and terms. Because a mortgage broker is an intermediary between you and the lender, he will handle all of the paperwork and do the research for you. However, mortgage brokers charge a large fee for their services, so if you have the time to shop around for a lender, you would probably be better off doing it yourself.

A third option when looking for an online lender is finding a mortgage referral website. After entering information about yourself and what you are looking for, these websites refer you to several lenders which you can compare in order to find the best mortgage loan deal. Mortgage referral services are easy to use, but you will have to go through the various offers and decide what better suits your needs and financial situation.

Tips for Applying Online for a Mortgage

While applying for a mortgage online is easier and has some great benefits, it also has some disadvantages. Here are a few things that you should keep in mind when applying for a mortgage loan over the Internet.

  • Use search engines. What better way of finding something on the Internet than by using search engines like Google or Bing? A few clicks and you can find some of the largest online mortgage companies. Of course, you can also use other sources in order to find online mortgages. Ads on TV, on the radio and in newspapers can also be very helpful when looking for an online lender.
  • Research the online mortgage companies that you are considering. Like shopping for a mortgage loan the old-fashioned way, you have to be careful when deciding which online mortgage lender you want to go with. Reading reviews about online mortgage companies and checking with the Better Business Bureau is something you should do once you find a lender with an attractive offer.
  • Have your financial info ready. Once you find a trustworthy lender that can give you a good interest rate and mortgage loan terms, make sure that you gather all of the necessary documents before they even ask you for them. You will need info about your income, your savings and your debt.

Online mortgage loans are an attractive alternative to conventional mortgage loans as long as you take all the necessary precautions. It’s easier for someone to scam you over the Internet, where you just enter your information without speaking to an actual person. That doesn’t mean that there aren’t legitimate online mortgage lenders. You just have to do a little research and make sure that what they are offering is what you will actually get.

Mortgage Lender or Mortgage Broker?

Narrowing the Field of Options
Mortgage Lender or Mortgage Broker?For any potential home buyer trying to determine the best course of action when seeking a mortgage, they certainly face a daunting task. Navigating their course through the multitude of banks, mortgage brokers, and on-line resources to find the most affordable offers and services requires a good amount of fortitude, common sense, and a well thought-out plan of action and achievable goals. No matter where their search takes them, most of these funding sources will be quite eager to discuss the options and take their application well in hand. The best strategy begins with a preliminary survey of which lending environment provides the most security and comfort, and then narrowing the field of options accordingly. The online mortgage rates tables and loan calculators can assist quite favorably in this process, as well as provide the borrower a good sense of just where the market is situated in terms of interest rates and affordability.

Check the Local Network
Whether the borrower is considering the services of a mortgage broker or banking institution, it is always a good practice to begin the search close to home. A great amount of useful information can be acquired in a local environment, such as banks or credit unions where a borrower has an established relationship. Friends and family members can also offer referral advice regarding loan officers or mortgage brokers who provided the best and most professional services, along with the most competitive offers. By virtue of the type of financial expense buying a home represents, a potential borrower deserves the very best attention when taking on such an important and long-term obligation like a mortgage loan. In fact, talking to the real estate agent they are considering working with is often a great place to start for their lender recommendations.

Evaluate the Performance and Service
mortgage broker's performanceWhen pursuing the mortgage options, a potential borrower will either resolve the decision on where to seek loan financing on their own, or acquire the services of a mortgage broker. One of the advantages of a mortgage broker is the ability to shop the loan funding among various lenders for the best offers available. While the broker may have the widest range of options to present, it is important to know that they do not necessarily have any special privileges or access to offers unavailable elsewhere, nor are they obligated to actually provide the best deal in the borrower’s interest, or at the lowest cost, because of their profit motivations. Certainly the best tactic is to speak with that particular broker’s most recent clients, to determine if they received the deal or loan specifications that where promised, did the costs or closing fees meet up with expectations, were the interest rates locked-in and did the closing process proceed according to the time-frame specified, and so on. Whether it is a banker or broker, the best mortgage deal will be evaluated based on how well the research has been done, and how carefully the potential borrower has studied all the options.

Finding a Mortgage Broker

Mortgage-BrokerGetting the best mortgage for your particular situation can be overwhelming, but if you find a mortgage broker or banker whom you trust they can help you with every decision. The key is trusting them. Someone that has been referred by a friend or family member would of course be the best of circumstances.

Some people may not have the luxury of knowing someone in the business or having a friend that has been through the home loan process. In that case, you can contact your local board of realtors or the National Association of Mortgage Brokers for a list mortgage brokers or bankers in your area. Definitely do your research on them and check references.

You want to find out first if they are licensed. This is extremely important. Find out how many lending institutions they do business with and how good their relationship is with that institution. This will allow you to have several choices in programs and rates that will suit you and your situation.

Find out what their fees are and how they are compensated for your loan. Ask the broker about the different loan programs they have access to and how they will work for you. Ask them why you should work with them over anyone else. They are well aware you have many options in this department.

mortgage brokerSome brokers may recommend specific programs because they get paid more on them. Make sure you either trust the broker or you have done your own research and homework on the specific programs. If you have bad credit most likely your mortgage rate is going to be higher than normal, but make sure your broker does not hide fees by raising your interest rate on you. This occurs more frequently with people whom do not have good credit.

Finally, be cautious of anyone that tells you exactly what you want to hear. Always remember, it is their job to sell you a program and they make money when they do. A good broker won’t force a particular program on you.