Uncategorized February 18, 2017

Shopping for Your Mortgage Online – Strategic or Short-Sighted?

The media is full of messages right now encouraging home buyers to shop online for a home loan, to make lenders compete for your money, and to take advantage of quick-and-easy, impersonal mortgage application processes. But is that really a strategy for success, or is it a recipe for disaster? How important IS your mortgage loan when shopping for your dream home?

Real Estate is a Team Sport

Every home purchase is unique, and the process of buying or selling a home is complex. In an active, competitive housing market such as ours, the complexities increase. Two sides, buyers and sellers, have similar goals – the sale of an available home to a ready, willing, and able buyer. Transactions include homeowners, home purchasers, real estate professionals, mortgage lenders (the institution) as well as loan officers (the individuals), appraisers, inspectors, title companies, escrow companies, and more. In order to fulfill the desires of buyers and sellers, these groups and individuals have to work together to accomplish a common goal – the transfer of real property according to a contract and on time. Any failure in the chain of events necessary to make this happen can have major legal, financial and emotional consequences for all concerned.

People You Know, Like & Trust

While more and more people switch from brick-and-mortar stores to shopping online, one thing remains the same. People continue to prefer to do business with individuals they know, like, and trust. So – what does this have to do with obtaining a mortgage online?

  1. Advertised percentage rates aren’t always the best deal. Independent mortgage companies and locally-owned banks often can meet or beat rates found online, and they may have loan products that better serve your needs. However, unless you connect with a local lender, you may not be able to take advantage of what they have to offer.
  2. Online financial institutions may provide the funding for your loan, but your assigned loan officer is the individual responsible for ensuring your loan is processed and funded and your purchase is completed. In an anonymous online application system, you have no way of knowing how experienced or successful your loan officer is, nor will you know how likely they are to help you succeed.
  3. Sellers rely on their listing agents to guide them through the process of accepting the best offer on their home. While there are many things to consider when reviewing any offer, the primary consideration is most often your pre-approval letter and the financing addendum – what type of financing is being provided, and who is providing it? When reviewing two offers alike in every way EXCEPT the lender, brokers will most often encourage sellers to choose the offer with financing provided by the loan officer and lending institution they know and trust to get the job done.

Bottom Line

While applying for a home loan in front of your laptop in your boxer briefs may sound appealing, it may not be the recipe for success you hoped it would be. Finding the home of your dreams only to lose it due to financing can be heartbreaking. Selecting a great real estate professional to guide you through the home buying or selling process is the best first step you can take. The next great step you can take is selecting a known and trusted local lender to help you finance your home. Asking your real estate professional for suggestions for lenders that are known, liked and trusted in your area is a smart, strategic move. And, as always, if you have questions please feel free to ask. I’m here to help!