5 Reasons to Apply For a Mortgage Online
by: Leslie Collins - 6/2007
The power and speed of the internet is leveling the playing field regarding getting a mortgage loan or any
type of loan for that matter.
The online appplication allows potential borrowers to network their loan application to hundreds of lenders who evaluate and return offers many times within 24-48 hours.
Smart lenders like 'Countrywide' have picked up on this and now literally bend over backwards to accommodate and gain customers via online applications.
Outlined below are some key reasons you may want to consider an online mortgage application.
1. Less expensive - Flat Fee VS percentage
Online fees are generally cheaper because they are fixed - Typical
loan origination fees are a percentage of the amount financed. Consider a mortgage broker charging you 1%-2%. This is based on the amount borrowed. So on a $250,000 loan the loan origination fee could be $2500 -$5000.
A flat fee paid to the ONLINE mortgage company eliminates that problem -
Compare that to a company like CHASE bank online, who does massive online mortgage business and charges a flat fee of about $550.
Loan deals, especially closing costs, can be structured many ways and are sometimes confusing - to the point that borrowers aren't sure if the deal they are getting is really the best. The ONLINE mortgage company eliminates that problem because Flat fees take the guesswork out for the borrower.
2. There is no initial credit inquiry. This is advantageous to you the borrower, because typically, your credit score drops each time a credit bureau makes an inquiry into your credit history. Instead, most online companies let you describe your credit history as accurately as possible. If you decide to proceed with that particular company then a full credit inquiry will be done.
3. Multiple mortgage companies compete for your Loan
You award your loan to the company with the best terms . Once you apply, your request is sent out to hundreds of brokers who evaluate the loan . Typically 4-6 of the best offers will be presented to you. This natural bidding process truly lets the market work for you.
4. Online Mortgage Application Process is Fast
Quick results. You usually receive feedback in the form of offers within 24-48 hours.
5. Online Mortgage Applications cover a variety of loan types
Covers all loan types.Typically the online brokers cover all the loan types available through regular brokers - home equity lines of credit, second mortgages, third mortgages, refinance loans, first time home buyer loans, sub prime loans for people with less than perfect credit or bad credit, debt consolidation loans, no money down home financing.
It is critical to pick mortgage brokers who truly specialize in the online aspect of mortgage brokering. .
Those companies who combine the "human touch" as well as expertise, knowledge, excellent follow up and speed to their service will ultimately win the most business. Look for ease of use regarding the interface - this is extremely critical as well as the availability of phone support should questions arise.