Choosing an Online Mortgage Lender
With all the lenders out there, how do you know which one to use for your home loan mortgage? Does it even really matter? What are the points you should consider when comparing lenders, and how do make sure the lender is legitimate? This article suggests that who you choose as your lender IS important, and presents some key factors to consider when comparing mortgage lenders.
First, why is it important to choose your lender wisely? The primary reason, is of course, cost. When you take out a mortgage, you are incurring a significant monthly payment and creating a large debt load. Therefore, you’ll want to look closely at a loan’s cost. In considering cost, you’ll need to look at more than just the interest rate. What additional fees are there and how much are they? For example, there could be a loan origination fee, underwriting fees, an appraisal fee, etc. These are taken into account and combined with the interest rate to come up with the Annual Percentage Rate, or APR. Hence, the APR is the most important number to look at.
If closing a loan within a certain amount of time is important to you, be sure to find out the lenders’ turn times. While one lender may take two weeks or more to fund a loan, another lender may be able to do it in less than five days.
The level of convenience offered may also play a role in who you choose. For example, can you upload your documents over the internet or will you have to mail them? Will you be able to apply for and choose the loan completely online, or will you have to talk to a person? Will the lender send a notary to a place of your choosing, or will you have to drive to a Title company’s office?
Once you’ve narrowed down your list of potential lenders, you may want to verify that the company is licensed or registered with your state by checking with your state government. Often this can be done online through the state’s website. One of the first places you might look on the website is the area for the Banking or Financial Institutions division or agency. You can also go the Contact Us page to find a way to contact Customer Support.
Besides seeing if the lender is able to provide loans in your state, you may want to verify that it has a valid business license in the state where its corporate headquarters are located. This can also be done online.
In review, here are the factors you may want to consider when choosing a lender: Pricing (especially APR), speed, convenience, and legitimacy. Deciding to buy or refinance a home is an important decision. May you make the best one!
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