The way the world is now connected by the internet seemed like a daydream 20 years ago.
The first time I got on the internet was 1998. How things have changed since then.
Getting access quickly to information has become so easy via the internet now especially with smart mobile phones.
It used to be that buying stuff, especially something as serious as a mortgage, should be shunned on the internet.
Now we make payments and send money via the internet without a care in the world. Heck! we even scan and send out identification cards via email to almost company that asks for it.
So it goes without saying that you can now get very reliable mortgage quotations in 5 minutes just by doing a quick search online.
But the question begs “Are these mortgage companies online reliable?”.
Before we answer this question, we should try to understand what has led to the trust home buyers put on mortgages found on the internet.
As consumers becomes more financially savvy in recent years, many people have now learned that all home loans whether they originate from mortgage lenders or brokers, will eventually come from Wall Street.
The many different avenues to get access to these funds to buy a house are just different distribution channels of money.
And even when you accept a mortgage, your lender can sell it to a third party within weeks of your closing.
This has led many home owners and buyers seeking alternative lenders and unknown brokers for loans as money is now a commodity.
Finding the cheapest sounds logical. But in an effort to find good value online, it also opens the door to fraud.
The question posted before has one of those boring politically-correct answers that start with “It depends”.
There are quite a few reputable internet lending companies online.
Some are straight out lenders, some are brokers, and some are information aggregators whose sole purpose is to pass you information.
But if you are looking for a real legitimate deal that hits the ball out of the park, you will not find it just from a simple search.
This is because there will always be money distributors who are able to give you a good deal from saving up on their marketing costs. This means that you will not find them passively as they don’t do much advertising. You need to find them actively.
That is… unless they are busy burning up investors’ money which seem like a trend these days of course.
In which case, they could really be the cheapest and with the type of exposure that you hum along with their soundbytes in the washroom
The internet is a quick way to get access to calculators, real estate information, valuation estimates, etc. Using these tools properly will enable you to gather material information on making your choice of a loan.
But a lot of times, these tools are not updated and interest rate information are not complete.
This is because a lot of these places that aggregate data from the banks actually update their information manually as they have no direct connection to the lender’s Interest rate.
There is every chance that you might end up with a loan that is more expensive that is listed by a portal.
Or that an online referral source quotes an attractive rate, but you get quoted a higher one when you land on the actual lender’s website.
And eventually, you will still need to talk to someone and sign the papers.
The internet is just a shortcut to information, not a replacement for loan officers.
A good deal on a mortgage is not just a matter of lower interest rates. A lot of borrowers often forget that it also includes advantages on closing costs items like legal fees, processing charges, low redemption penalties, etc.
It must be a deal that meets your financial needs.
This is a critically important decision that most borrowers don’t put enough weight on.
Analyze your suitable loan tenor and the down payment that will be used. Then fill out online forms asking for quotes.
Once you get them, go to a physical lender to ask for their quotes. Compare all of them to see if “promotions” are really what they claim to be.
While it might annoy you to find interest rates higher than what you saw online, there is also a chance that they are lower when you physically visit a bank.
If both an online lender and physical lender have the same rates, I would go for the physical one just for the peace of mind.
Always get offers in writing instead of just a verbal one.
For a mortgage that will costs hundreds of thousands in real dollars, no one will blame you for shopping like a mad man on the best deals in town.
Finally, be wary of fine prints.
These are measures to take on protecting yourself whether the lender is a physical one or a virtual one.