by Sushil K. Tuli, President, Leader Mortgage Company and Chairman of the Massachusetts Mortgage Bankers Association.
Not so long ago, when a homebuyer needed a mortgage, he or she had to put on his or her Sunday-best and pay a visit to the local banker - the man in the blue suit who sat in the oak-paneled board room behind a phalanx of secretaries and security devices. Today, your banker is now more likely to be a woman, your bank teller an ATM machine, and you may even be banking on-line. How things have changed. What is more, today you don't even have to get out of your bedroom slippers to find a mortgage. Welcome to mortgage shopping on-line.
Finding a mortgage on-line may be just the thing for your busy schedule, where lender web-sites provide easy to follow applications and a full array of services and products to fit your needs.
Why shop for a mortgage on-line? The following five-point strategy may help your understanding:
1. Web shopping is an excellent research tool.
This may be the easiest way for you to compare and contrast lender rates and programs. In addition, you may find that some lenders will offer discounts and other incentives for you right on their web-site if you apply with them. In order to attract new clients and provide greater customer-service, mortgage lenders are now putting pertinent information about their services, array of mortgage products, interest rates, terms & conditions, and important market information on their web-sites. A borrower now simply has to log onto these sites to get a very informative first-look at what area lenders are offering, and then choose the lender that best fits his or her needs.
2. Better Lender Service.
Most lenders' web-sites now offer pre-qualification and pre-approval applications for you to fill out at your convenience. Once you've narrowed down your list of potential lenders, simply fill out the 10-minute application form to get 24-hour approval of your loan. These sites also provide instant estimates of how much of a mortgage loan you qualify for, and how much of a down-payment would be required for a particular condo, single-family or multi-family property you wish to purchase. The on-line approach to mortgage shopping is best, as it saves you time and effort, and you will know - in most cases the next day - if your loan has been approved.
3. Lower Costs.
On-line mortgage origination reduces lenders' expenses, so they can pass these savings on to you in the form of lower application fees. This Internet phenomenon has introduced greater competition among lenders, resulting in lower pricing and greater efficiencies in the administration of your loan. Both of these results have benefited the consumer in terms of lower charges and closing costs.
4. Finding the mortgage for you.
Mortgage shoppers can now surf the Web to find a wide variety of loan programs to fit their particular financial needs. These web-sites may answer many of your questions for free. Are you are better off with an adjustable rate or fixed mortgage product? Is a bridge loan alternative better for you if you may not wish to sell your home prior to purchasing your new home? Whatever your circumstances, most lenders can now answer these tough questions for you in minutes and put you on-track to the mortgage strategy and products that suit your demands.
5. Limitations.
Although the Internet has become an excellent tool to help borrowers get fast service while at the same time increasing their knowledge about the mortgage products and services, this option should not be regarded as a replacement for the face-to-face trust that one can get from his or her mortgage broker or loan officer. Quite often, your mortgage broker has a better understanding of the conditions in your local market area, and if necessary, may provide you with particularized assistance to get you into that new home. Also, while there have been some concerns raised about internet commerce, such as security if information, privacy, reliability, and potential governmental regulation, these concerns are waning as the technology improves and standards are observed.
In the loan origination game, the Internet has taken center stage. Over 55 million Americans are now surfing the web. Projections indicate that by the year 2001, 80 percent of all companies will have a web presence - changing the way you will be shopping. With the Internet in our homes, both the homebuyer and the mortgage lender are now just a click away from each other.
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