Today we tend to do everything online—from dating and being social to ordering groceries and banking. But, when it comes to getting a home loan, does it make sense to go with one of those online mortgage companies?
If you’re thinking about going online to track down a home loan, here’s a quick rundown of the advantages and disadvantages:
THE PROS
Online Loans Can Be Simpler:To make sure you can afford that house you have your eye on, financial institutions want to make sure you can afford it. To get a mortgage, loan officers often ask for a stack of paperwork and a list of documents that help us understand what you can afford. This process can be tedious and time consuming, but an online service can make the application process simpler. Instead of hunting down and carting tons of tax returns and other financial documents, you can easily upload them to the lender’s website or simply connect your financial info. This technology can speed up the loan process and, in many cases, allows you to track the status of your loan online.
You May Get Lower Rates and Fees:Online mortgage lenders often have less overhead than banks or brokers. These lenders often boast that they can pass on that savings to customers in the form of lower interest rates or fees.
Online Applications Save Time:Instead of traveling to an in-person appointment (where you have to cart in all those documents) you can work on an application as it makes sense with your busy schedule. You can fill out an online application while you’re waiting to get your oil changed…or while you’re hanging out with the kids…or at 2am when you finally have a minute to yourself.
THE CONS
Online Forms Can Be Confusing:While it’s convenient to fill out a form from the comfort of your living room, online loan applications can be confusing. The risk of making an error is higher than if a professional walked you through it. Misunderstanding a question and making a mistake could cost you more money or result in a problem down the road.
Online Lenders Can Have Low Customer Service:Most online-only mortgage lenders don’t provide a dedicated person to answer your questions and help you through the process. So, if you are confused about a question on the mortgage application or need assistance, you might be stuck with a 1-800 number with limited hours. Handing over your most personal data and working through possible bumps in the loan process can be nerve-wracking if you don’t have good customer service.
Rates Aren’t Always Guaranteed:Jumping on board with an online mortgage lender because they’re promising you a super low rate can backfire if it turns out that you’re not eligible for a great deal. By that point, you could be several weeksinto the process, so you might feel like it’s too late to back out. And as a result, you could end up paying more for a mortgage than you had originally planned.
Beware of Scams:Of course there are online scams that you need to be aware of. If a deal sounds too good to be true, it probably is. Beware of any unusually low interest rates or any sort of prepayment. Consider checking with the Better Business Bureau or doing a simple google search. Then, you can carefully compare the loan terms they’re offering to make sure you’re getting the best deal.
GET THE BEST OF BOTH WORLDS: A Simple Online process with A Helping Hand
If you’re looking for an option that blends the convenience of online with the comfort of a professional loan officer, look no further than ALCOVA Mortgage.
Convenient Online Application:Just like online-only lenders, ALCOVA Mortgage offers a convenient online application that takes the hassle out of homebuying. You can fill out the online application and easily sync your financial info through your phone, tablet or computer…anytime, anywhere.
The Comfort of a Helping Hand:Having one-on-one interaction, especially when it’s about money, can be enormously beneficial. Unlike online-only lenders, our loan officers are here to answer your questions and guide you every step of the way. We can even fill out the application with you.
Looking Out for You:Though interest rates and fees may be lower with online lenders, it isn’t always the case. ALCOVA Mortgage can shop around to a variety of different lenders, loan programs and underlying investors to find the loan that best suits your needs. They may even end up saving you money.
Go with What Makes Sense for You:Putting information online isn’t for everyone. If you don’t like the virtual mortgage process, seek out a loan officer who can meet with you in person. At ALCOVA, we pride ourselves on having the flexibility to work around your schedule—in person, on the phone or online.
