Mortgage lending is yet another industry that has undergone massive change by the internet. Online lenders advertise fast and easy transactions while traditional lenders offer more personal service.
Regardless of which option you choose, it’s important to understand the difference between a mortgage broker and a mortgage lender. A lender is a direct supplier of loans, such as a bank or credit union. A mortgage broker has access to many direct lenders and shops around to find the best deal for you.
Easy application process. Several years back, online mortgage sources, such as Quicken and Lending Tree, had a distinct advantage in terms of ease of application, but times have changed. Most local and regional lenders now have online applications as well as local offices where buyers are able to sit down face-to-face with a representative.
Customer service. With a large online firm, buyers may have multiple representatives handle their files while local firms are more likely to appoint one person to answer questions and help with issues that arise throughout the process.
Convenience factor. Online lenders tend to emphasize convenience. For example, Quicken has won national awards for customer service, which is available online and by phone. Quicken customers can follow the progress of their applications via an app.
Savings. High-volume online lenders can often save you about 0.25 percent on your rate and may have lower fees at closing. The reduced rate alone can save you thousands over the life of the loan.
Be cautious. Avoid clicking on unprofessional-looking online ads for companies that make unrealistic promises. You may be inundated with phone calls from solicitors. It’s a much better practice to directly contact well-known companies through their websites.
Are you a newbie? First-time buyers who are unfamiliar with mortgages may benefit from the one-on-one personal attention provided by an established local or regional firm. Especially when problems arise, it’s comforting to deal with a familiar face.