The soaring popularity of the online marketplace has changed the way mortgage lenders and aspiring homeowners do business. While in the past there was a lot of face to face contact or at least a lot of personal interaction via the telephone, today’s mortgage is often done entirely online and via email. A changing business environment has brought with it a lot of advantages consumers are enjoying, but there are also some pitfalls they need to be aware of. A guide to finding and getting that perfect mortgage online will try to make that process for getting the online loan just a bit easier and safer.
First things first: you need to find out how much house you can afford. There are several free online mortgage calculators
that let you play around with the overall loan amount, different interest rates, and also various lengths of time. In most cases these calculators will also reveal if fit into the debt to income ratio that lenders want to see before offering their home loans to consumers.
Next, evaluate your credit. If you have not ordered your credit report in a while, now is a good time to do so. Know what is found in your credit file and correct and mistakes that you find. In some cases potential borrowers were denied loans or advantageous interest rates because of derogatory notations in their credit profiles that did not even need to be there! Correcting any mistakes is quickly and easily done.
At this juncture you know how much you can afford and what your credit looks like. This will influence the lenders you might choose. Essentially there are two kinds of lenders doing business online: the established banks with an online presence that let you submit your application via the Internet, and the web-based that does not have a brick and mortar building and does business exclusively online. There are good and bad ones of both ilk and it is a good idea to check their Better Business Bureau rating before committing to one and putting in an application. As a general rule, established and well known lenders are less likely to cause any problems than the unknown ones.
Be wary of supplying too much information up front. The initial contact with an online lender should be a general fact finding mission where you test the waters to see what the lender can do for you. Social security numbers and such information should not be offered at this juncture, nor should it be demanded by the lender. The goal is to find out which loan products the lender has available and – if all the fact you provide are correct – what the bank can do for you.
When you do choose to go ahead with the application process make every effort to find the best deal that will work for you now and in the future. Using online mortgage brokers is one method of weeding out lenders that have rates which are simply too high. In other cases you will find that the direct competition between lenders online has led to amazing deals you can take advantage of.
Beware the teaser rates that some online mortgage companies use to entice new homebuyers to write up their mortgage with them. Compare and contrast the aspects of various different loan products and know exactly what it is that you are choosing. If a package is considerably cheaper at one lender than at another, peruse the fine print carefully.
The final suggestion for finding that perfect mortgage online is the same that accompanies any big purchase: whatever is agreed to, get it in writing! While the individual broker may promise that she will take one half point off your overall interest rate, ask to have it put in writing into the loan papers. Once signed, notarized, and submitted, they are binding and if the special deal you were offered is not part of the agreement, it simply does not exist.
