By: Jim Gallagher
If you are anything like the normal American, then your life is probably busy. In an effort to curb the chaos, people often look for the easiest way to accomplish the tasks they’re facing. Mortgage shopping and applications are no different. In fact, by 2015 48 percent of borrowers chose an online lender over a local mortgage company in an effort to save time.
If you’re about to start the process with an online lender, we urge you to reconsider. The temptation of quick and easy online mortgage shopping does not correlate with a quality loan or a seamless process for what is usually the biggest financial decision of your life. Here are four reasons why working in-person with a local mortgage loan officer is superior to using an app or website.
1. You have an expert on your team
Online loan companies offer limited options if you need personalized help or guidance during the process. Once you submit your application, you’re often stuck in limbo as you wait for the next step with very little communication. If you have any issues while filling out the application, while the paperwork is processed, or in choosing and accepting a loan, your only way to address the problem is usually an 800 number and a call center representative.
With a local lender, you can give your loan officer a call or walk into the office to address any issues person-to-person. You then have a professional who knows you on a personal level and who has gone through the process hundreds of times by your side helping you avoid holdups and costly mistakes.
2. There is no such thing as “hidden” rates online
While online lenders do sometimes offer lower rates than traditional lenders, don’t be fooled into thinking that online is the only or best way to get a low rate. Mortgage rates are primarily based on the current market, not just what the bank or lender wants to give you. The differences that you find between mortgage companies, online or otherwise, are based on factors like location and value of the property, how the company views your credit score, what the company thinks your down payment should be, and the company’s current portfolio.
Keep in mind that every amazing rate you see online before you submit your full application comes with a note hidden somewhere on the page saying something like “for informational purposes only” or “subject to change without notice”. Too often people are faced with this reality weeks into the home buying process, when it may be too late to back out.
On the other hand, an experienced loan officer won’t give you a “subject to change without notice” rate and lead you into an unexpected situation. Instead, you’re working with a real person who can provide all the information you need before making a decision.
3. You’ll be working with a local expert
If you work with a loan officer, you’ll probably be working with a person who lives in or near your neighborhood. They know the local market, local realtors, what kind of loan the guy down the street got, and what you and your neighbors go through to buy a home. They also know that their business depends on giving you a good experience and the best rate possible so that you tell your friends about it. Not to mention they’ll probably see you around town.
You are much less significant to online companies once you hit the accept button. To them, referrals are good, but they’ll get more customers from ads.
4. Online mortgage shopping sites usually result in solicitations
Before you start entering your personal information into a website that gives you several comparison rates, consider the fact that comparison sites are simply selling your information to lenders. After you complete the “application,” you’ll probably get a flood of calls and emails from lenders offering their “for informational purposes only” rates. You could even start getting solicitations from credit repair companies, home insurance companies, and so on.
The best way to avoid online scams and solicitations and to get all the information you need is to speak to a professional in person.
Do your homework
Before making a decision as big as choosing a mortgage for your new home, make sure to consider the type of experience that you’d prefer. It may seem nice to apply for your loan while watching Netflix, but having an experienced person by your side will probably make you happier – and make the process easier – in the long run. If you are considering buying a home or have any questions about the process, feel free to give us a call.