In theory, shopping for an online mortgage should be faster, the service should be better and the cost cheaper vs. using a local broker or even a bank. One would assume that at least a portion of the money saved in paying larger commissions to self generating loan officers would be committed to salaried inside reps, always available and highly skilled with mortgage knowledge and the entire loan process.
…..ahhhhhh – listen up potential mortgage customer – understanding the pitfalls and issues that arise from online mortgage originations is essential BEFORE committing to a loan proposal. Below are the Top 5 Questions to ask when considering an Online Mortgage. Without a doubt this list could be the top 100 questions to ask a mortgage lender. But here are what I consider the 5 essential questions to have answered.
From my 18+ years experience in the mortgage business –
The Top 5 Questions when considering an Online Mortgage.
1 – Where are you located?
With no disrespect to my overseas friends and comrades, the American Real Estate industry has been hit by a tsunami the past few years. Wouldn’t you want to work with someone who is living the same housing value hell as everyone else.
2 – Are you the order taker or the actual loan officer?
We are talking about the biggest financial decision you will make probably until the next time you by a house or decide to refinance. Ask the person you talk with initially if they will be handling your file all the way through closing or are they nothing more than a liaison hat is the contact person. Better yet, ask them if they are the actual loan originator on the deal. To take it another step further, ask them if they have a direct phone number or is their preferred method of communications with clients by email. It makes a difference, trust me.
3 – Are you a Lender or a Mortgage Lead generator?
Companies like Zillow and Trulia do a great job of aggregating mortgage content, advice, rate trends, etc… but many of them are simply utilizing their audience as a lead machine platform. Lending Tree, even though they have a mortgage division of their own, sells your loan request to companies that compete for your business. Not always a bad thing, but understand who your lender is from the start. In addition, the lender funds the loan.
4 – Do you make Mortgage Underwriting decisions in house?
So you now understand there are shops that simply want your name and basic needs but have nothing to do with the loan process. Next up the food cain are shops have are licensed to lend, but choose to have the processing and loan underwriting done offsite. This can delay and even sometimes impact loan decisions, especially in cases where underwriters have no feel for the local real estate climate.
5 – Do you produce closing documents in house?
Same as above, many times issues arise only because the closers do not understand local guidelines and procedures. Another common issue with not having underwriting or closing departments in house is the question of, who is controlling the loan process. My experience has shown me when a loan package leaves my office, my customer service now is 100% in someone else’s hands.
Have you experienced an issue while getting a mortgage online? Let’s hear about it…