Getting a mortgage online is fast becoming more common. Thousands of homebuyers and homeowners still haven’t made the transition over to online mortgage lending. But there are several advantages to doing it, so you should certainly give it a try on your next mortgage application.
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Here are some of the biggest benefits of getting a mortgage online.
Lower Interest Rate and Loan Fees
Online lenders can often offer lower interest rates and even lower loan fees than traditional brick-and-mortar banks. This is because online mortgage lenders don’t have physical branches all over the state or the country. The online mortgage process also tends to be simpler than dealing face-to-face, which means that online lenders can get the job done with fewer employees.
The lower cost of doing business enables online lenders to pass some of the savings along to you, as the consumer. Since it doesn’t cost them as much to process your application and make your loan, the entire process is less expensive.
It may also be true that since competition for online mortgages has become more intense in recent years, that online mortgage lenders have to keep their rates and fees lower. Competition forces this to be the case, and you as the borrower can benefit.
There are so many ways that the online mortgage process reduces the time needed to process and approve your loan.
First is the fact that you don’t have to leave your home to go to the lender’s office or another location to complete the paperwork. That saves you commuting time. But it also saves you even more time, since you don’t have to complicate your situation by running additional documents to the lender’s office.
You also don’t need to spend time making copies of necessary documents. Since you will supply all necessary documents – including application forms – online, there’s no need to copy any paperwork at all. And if you already have a lot of the necessary documentation, such as pay stubs, W-2s, and bank statements, already stored online, all you need to do is attach them to the loan application.
This also creates a major benefit in the online mortgage process. Since your information will arrive at the lender’s office immediately, the entire process moves more quickly. It also saves the lender time, by avoiding the need to make physical copies of documents. Since everything is already online, they can print any copies that they need, and store everything for future use.
In considering the process with banks vs. online mortgage lenders, you can cut the processing time on your mortgage down from 30 days to no more than two weeks in many cases.
Apply From the Comfort of Your Own Home
Getting a mortgage online may be a psychological advantage more than anything else. Many people feel uncomfortable going into a lender’s office to apply for a loan. This is particularly true when you have to walk into a bank branch to do it, surrounded by all the well-dressed bank personnel.
It’s a matter of applying for the loan on the lender’s turf – which gives a psychological advantage to the lender, and maybe even a physical one as well.
There’s also a practical advantage to applying from home. Home is where you store all of your important documents. If you go to a lender’s office to complete the application, it’s very likely that you will forget to bring one or more documents. It’s equally possible that the application process itself could cause the lender to determine that you need additional documents to support an unexpected situation in your loan application.
For example, let’s say that only during a face-to-face meeting does the lender’s loan officer learn that you were divorced, and you receive alimony income. You will generally need a divorce decree and even several months bank statements to prove the income. At a face-to-face meeting, those documents won’t be available.
But if you are applying for an online mortgage, you can simply go to the file cabinet or room in your home where you have those documents stored. Or you may even have them stored on your home computer. In either case, since you have not left your home, the documents will be readily available.
In my experience as a mortgage loan officer, one of the biggest delays in the mortgage process was obtaining follow-up documentation. But the online mortgage process virtually eliminates that problem and expedites your application.
In this day and time – when so many businesses are now operating on the web – you owe it to yourself to consider getting a mortgage online and use the services of online lenders. The money that you will save, as well as the time and aggravation, make it worth the effort.