The Advantages And Disadvantages Of Online Mortgage Lending
Online mortgage lending appears to be the way of the future. However, there are some important things to consider when dealing with online mortgage lenders. |
Let’s start with the advantages of
online mortgage lending.
Online mortgage lending is a growing field that is starting to seriously compete with
traditional ‘in person’ lenders. The process is relatively easy. The important
thing to remember is to make sure your know the ins and outs of any and all
online home mortgage loans prior to submitting your personal
information.
In some cases, you’ll find online
mortgage lending fees can be much cheaper than traditional ‘in person’
lenders.
Further, when it comes to online
mortgage lending you may discover a greater range of mortgage loan programs
available. Among the highlights of these programs may be lower rates of interest
and flexible repayment terms.
Also, borrowers with a bad credit history
may find online mortgage lending to be the answer to their prayers. In
most cases, web-based lenders offer more alternatives to those with less than
desirable credit ratings.
Finally, online mortgage lending can
shave a ton of time off of the traditional ‘in person’ route and having to wait
(what might be several days) to be approved. The bonus here is if you don’t get
approved the first time, you can apply to another lender right away and like the
first time, you’ll get your answer quick.
Now let’s explore the disadvantages of
online mortgage lending.
It’s important to realize that not all
online mortgage lenders have representation in each of the 50 states. Before
taking the time to apply online, it’s in your best interest to make sure that
the lender in question is represented in the state in which you
reside.
A big negative with online mortgage
lending is unfortunately accountability. It’s your job as the potential
borrower to do your homework and keep on top of your application. It’s wise to
check out the company to make sure they’re legit and will be able to fulfill any
promises they make regarding terms and interest rates.
Unfortunately with both traditional and
online mortgage lending, the mortgage loan programs offered may be more
in lender’s best interest than in yours. Again, it’s so very important that you
do some research and comparison shopping. Just like with traditional ‘in person’
lenders you want to make sure that any online mortgage lending is in your
best interest not theirs.
Another possible negative is the fact that
some online mortgage lenders will charge you a fee prior to you learning
whether or not your application has been successful. Please note that some
traditional lenders also ask for a fee upfront. Borrowers beware – there are
many legitimate traditional and online lenders than don’t insist on such a
fee.
Unlike any negative dealings you may have
with traditional mortgage lenders, online mortgage lending isn’t regulated by a
governing organization in which you can complain to.
The bottom line is that while online
mortgage lending may be the way of the future, it’s also important to
research the lender and ask the right questions. And, while applying for a
mortgage loan online may seem like a great idea, don’t discount the value of
getting a comparison quote from a traditional ‘in person’ lender.
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