The internet has made applying for a mortgage a much easier process. Many online lenders will provide lower fees, quick response times, and the ability to submit your financial information online.
There are many advantages to applying online ranging from the quick response to the reduced fees to the variety of lenders available online. Applying for a mortgage online also has some disadvantages that a careful consumer should be mindful of such as the reputation and accountability of some online mortgage companies. There is also the lack of dealing with a lender face-to-face as one would encounter with a traditional lender. Here are five tips for applying for a mortgage online.
Use the search engines to locate online mortgage companies – Search engines such as Google, Yahoo, or MSN are great ways to locate online mortgage companies. Entering “online mortgage” into the search box will return a number of results ranging from the online mortgage lenders such as ditech.com, lendingtree.com, and eloan.com. As mentioned before, consumers should be wary of the different online mortgage companies that result from their online searches. Other results may be for the traditional mortgage companies such as Countrywide, Wachovia, and Bank of America are also returned. Many of these traditional mortgage companies also offer the ability to apply and get approved for loans online.
Use other sources to find your online mortgage company – The internet is not the only source for finding the online mortgage companies. There are numerous commercials on television, in magazine and newspaper ads, or in information you receive in the mail. Your local bank, credit union, or other financial company may offer online mortgage application capabilities. This works well because you may already be familiar with these institutions and know the reputation of these companies. This may help in the research aspect that is outlined in my next tip.
Do additional research on the online mortgage companies – If you are interested in an online mortgage company that you are not familiar with, be sure to do additional homework before you submit your online mortgage application. According to an article on the Nolo website at nolo.com, it advises mortgage shoppers to use the same diligence when you are shopping for online mortgages as you would do with traditional mortgage lenders. The article advises consumers to watch out for things such as lenders offering teaser-rates, those that usebait-and-switch tactics, and be careful of online lenders that put important information in small print.
Have financial information ready – Once you decide on the online mortgage company that you will use, be sure to have your financial information ready. They will want to know the same type of information that you will have to provide to a traditional mortgage company. Earnings information, savings and investments, and outstanding debts are all necessary when applying for an online mortgage. I would advise you to create a spreadsheet or list of all of your debts with the monthly payments and outstanding balances so that you will have an idea of how much you owe. You should do the same for all of your savings and investments. If you have varying sources of income, put them on a list, too. Some online mortgage lenders may gather your debt information from your credit reports but it is always helpful to have the information yourself to compare against what they retrieve from the credit bureaus.
Complete the online application – Once you have all of your information at your fingertips, the next step is to actually complete the online application for the mortgage. This process will vary from site to site but in many instances should only take a few minutes. Some sites such as Lending Tree and Ditech.com, will take your information and submit it to several lenders and provide you will several rate quotes from these lenders. Other online mortgage sites will have someone contact you to review your mortgage options. Most will have someone contact you even after they have e-mailed you the rate quotes from the different lenders.
The next step after this is to decide which online mortgage company you will accept your offer from. These are your tips for applying for a mortgage online; an easy process if you do your homework and prepare yourself before starting the process.
