Home Mortgage 101: Shopping for
a Mortgage Online |
By Brandon Cornett |
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The Internet has changed all aspects of the home buying process,
including the way we shop for mortgages and choose lenders.
In the early days of online mortgage lenders, there were few choices
and plenty of shady practitioners. But today you have many more
options, and government regulation has helped limit the number of
"predatory" lenders using the Internet.
Still, it pays to be
informed and to do plenty of research. Here then are some of the
pros and cons of online mortgage shopping.
Online Mortgage
Shopping Advantages
Shopping for a home mortgage
online lets you compare many loans at once. Before the Internet, the
only way to do this was to make a lot of phone calls and office
visits!
Another advantage is that you can do your research
and make inquiries anytime day or night. So if you work full time,
you can do your mortgage homework in the evening (when an actual
mortgage office would be closed).
Online Mortgage Shopping
Disadvantages
Because of the anonymous nature of the
Internet, you have to be careful when shopping for a mortgage
online. Of course, this is true of any Internet site -- dating
sites, auction sites, commerce sites, you name it.
Some
mortgage "companies" use the Internet to prey on naive victims. So
always do plenty of research, and ask plenty of questions. Stick to
the mortgage companies you know and trust. Be wary of the lesser
known "mom and pop" companies.
Another disadvantage to
shopping for a mortgage online is that the quote you get may not be
as accurate as what you'd get in person. There are a lot of
variables in the mortgage process (credit history, debt to earning
ratio, etc.), and a website can't consider them all. Nor can it
answer your specific questions or give you advice.
That's not
to say online mortgage companies can't answer questions and handle
unique circumstances -- they just can't do it through their
websites. Eventually, you'll have to speak to a representative.
Conclusion
Shopping for a mortgage online can be a
convenient time-saver. But you have to weigh both sides of the issue
to see if it's right for you. Do your homework and ask plenty of
questions. Be careful transmitting financial information over the
Internet. Stick to the companies and names you trust. In short, look
out for yourself.
* Copyright 2006, Brandon Cornett. You may
republish this article if you keep the byline and author's note, and
also leave the hyperlinks active. |
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