Online Mortgage Loan

There was a time, just a few short years ago, when shopping for a mortgage loan meant a trip to the local bank or a call to a local mortgage broker. Today, with the access provided by the Internet, borrowers have a multitude of lenders available to them with only a click of the mouse. But with hundreds of websites to choose from, how do you know who to select?

First, we need to understand the different categories of companies that are marketing online for your mortgage loan through their websites. Knowing the difference between them can be a big help when making the decision as to which company to work with to obtain your mortgage.

Direct Lenders
These websites are owned and operated by banks and mortgage companies who lend directly to consumers. Many, if not most, of these lenders also offer their loan products to consumers through brokers. Each lender has a handful of loan programs from which to choose. Most lenders have a specific market in which they are comfortable lending, and their loan products reflect their interest. For instance, some lenders are not comfortable making mortgage loans to first time home buyers, and others may have several options available from which first time home buyers may choose. The lender will charge an origination fee or will raise the rate slightly to cover their fees.

Mortgage Brokers
Mortgage brokers must be licensed in the state in which the real estate is located. They have an advantage over direct lenders in that they have multiple lenders from which to choose. Sometimes hundreds of lenders are at their disposal. By combining the myriad of programs available through the broker's lending sources, the borrower has the advantage of shopping for the best online mortgage loan available and only needs to work with one loan consultant. Your mortgage broker should ask questions about your situation to make sure he or she can present the best home loan and the best mortgage deal for your specific situation. The use of a broker should not cost you any more than going directly to the lender. Both usually charge an origination fee, and the broker may get paid a portion of their fees by the lender.

Mortgage Lead Providers
These websites advertise that you win when banks compete, or they tell you that they will find lenders in your area. The truth is that these sites take your information and sell it to brokers around the country. Brokers pay for the leads generated by these popular websites. Very few, if any, actual direct lenders participate in purchasing leads from these sites. Once you have provided your information to these websites, this information is sold and resold for as many as three months. Some borrowers have been called a year after they purchased or refinanced. You should NEVER provide a Social Security Number in an online mortgage application until you have spoken with the loan consultant and believe that they can help you.

Shopping for an online mortgage loan can be the way to get the best mortgage deal available. Whether you choose to go directly to a lender or work through a broker, communication is the key. Make sure you are comfortable with the person on the other end of the deal.

By: Craig Roll
Email: croll@firstequitymtg.com
Website: www.firstequitymtg.com

Craig Roll is an expert in residential and commercial mortgage financing. His company, First Equity, may be found on the web at http://www.firstequitymtg.com.

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