Online Mortgage Companies
So, you’re in the market for a new home and you need a mortgage. It is a great idea to shop around. While rates are mostly based on you as an individual and likely won’t change with vendors, there are other factors that can cost you more from company to company. My first recommendation is to ask your Realtor. If you don’t have a Realtor, ask a friend for a referral if they were happy with their lender. You will likely check out online mortgage companies as well. I will give you some pros and cons and things to watch out for.
A personal referral is almost always a great way to go. Here’s why:
- Someone you know and trust has used them or recommends them.
- Depending on the referrers relationship, you may get some discounts on fees or they may rush the process if needed.
- This lender will likely check lots of options for you and suggest the one or two loan programs that suit your needs best.
- You have a personal advocate to work things out on your behalf and you aren’t going through a call center.
- If they are local, you can go to their office to go through paperwork so you understand the process and what you are signing.
Online mortgage companies can be great, but they can also be a nightmare. Here’s why:
- Unless you have been referred to an actual person at an online company, you are just getting whomever happens to be next on the list at the time you contact them. They may or may not have a good amount of experience.
- Some online mortgage companies tout low rates but you need to make sure to get a list of all the fees they will charge. Unfortunately, even if you ask for all fees up front, you may have a surprise fee show up in the process or even at the closing.
- Since you don’t have a personal relationship, some online mortgage company employees can be a bit more callus and not be as concerned with your referrals or reviews, therefore, not advocate for you if things go wrong.
- Some online mortgage companies may not have the ability to do all types of loans, therefore, they may push you into a loan that isn’t really the best for you.
- If/when delays happen or issues arise, it is much harder to get to a person in a superior position to help.
The most delays and disappointment I have seen my clients deal with is when they have used an online mortgage company. This is not to say that some have not had great experiences, but the majority have not. Rule of thumb, ask around, check reviews and then check your gut. Be prepared for something to go wrong and have contingency plans and hopefully you won’t need to use them!
Michelle Froedge is a residential Realtor and Principal Broker in the Greater Nashville and Williamson County areas of Tennessee. “Mom” to four-legged fur babies, Tyler and Livvie, Auntie to Zelamie, she is a vegetarian and sings in her spare time. Michelle has lived in Nashville and Franklin since 1997 and has been selling homes since 2004.