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Mortgages and the Internet

Borrow money over the Net?
Much has been written about online lending; some good, some not so good. The convenience is undeniable, and it can't possibly hurt to collect enough high-quality information to help you make an informed decision, or to compare rates from a lot of lenders.

Some of the sites that advertise a lot, though, don't close very many loans. One very well known site in its initial public offering admitted it closed only one out of every eight applications. The low rates available on the net are great, but not if you can't get them.

Using the Net
There are a number of ways you can make the Internet work for you for your next mortgage. Visit a lot of sites and bookmark the ones that give you clear, honest and valuable information. Once you have made your comparisons, go back to the site that scored highest and fill out an application.
Comparing Online Mortgage Companies
Here are some useful guidelines and questions for your comparison:
  • Were you able to learn what you needed? This will tell you if the site was developed by experienced loan officers or not. If someone can't deliver a great experience online, can they deliver a great experience in person?
  • Does the site function properly? A company that isn't very good at making a web site work right may not be very good at the technology needed to close your loan efficiently.
  • Compare the rates posted on each site. Are they updated every weekday? Do you have a selection of price points on each program? Do they make you give them information before they'll give you a quote?
  • Call and ask to talk to a loan officer. Will you have access to a licensed, experienced loan officer if you have questions? Will someone be watching over your loan throughout the process. Don't be afraid to ask about experience.
  • Is your privacy assured? Many Internet companies make more money from selling mailing, telephone, and spam lists than they do from their services. Ask about their policies.
And some tactical good rules to follow:
  • Email the company and ask some more questions about them or about their loan programs. Their response time and the quality of their answers should tell you a lot about what your experience might be like. Ask them about their rate-lock policy and strategy. More than any other part of the transaction, this will save you money if they do this right - or lose you money if they don't. (This is an industry secret they don't want you to know. Shhhhhh!)
  • Don't submit multiple applications. I know, you think the competition will help us sharpen our pencils. I would avoid this like the plague for two reasons: First, if you aren't convinced that someone will do a great job for you and find you the best rate and cost, what would make you believe they will deal honestly with you? Second, do you really want to have a lot of people in possession of the information needed to steal your identity?
  • If your lender has not given you a satisfactory good faith estimate within two days, drop them and tell them to cancel your application. Make sure it's signed and you have confidence in it.
  • Follow up! If you don't hear from your loan officer every two or three days, particularly if you are not yet locked, call and find out why!
The Bottom Line
Online lending really isn't any different than the old fashioned, walk-in-the-door lending. Do your homework, get to know your lender, keep your eyes open, and read the fine print. Still not comfortable? Then use the knowledge gained online to make your personal dealings go more smoothly.
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