The Good and Bad of Online Mortgages
With online mortgages, potential St. Louis home buyers can do their entire application online on their phone or computer instead of having to go to a bank and do paperwork in person. This option is getting more popular, as the majority of Millennials would prefer to get a mortgage this way.
While online mortgages are convenient, there are disadvantages to them as well as advantages. Read on to discover if this method of home financing is right for you.
Easy to Compare
A key advantage to online mortgages is that it is easier to comparison shop. It’s much easier to compare lenders online than to go from bank to bank. Mortgage experts say you should compare at least three lenders. Make sure to get a good-faith estimate from each that includes the mortgage’s rates and terms so that you can compare to see which is the best deal.
Lower Rates
Online lenders frequently are able to offer lower rates and fees because they don’t have as much overhead as a traditional bank. This means big savings for you over the long term if you get even a slightly lower interest rate. You could save thousands of dollars in interest over the term of your mortgage.
Quick Turnaround
Online mortgages can be applied for and obtained quickly. The application process can easily be completed in minutes. Some mortgage apps allow you to scan documents with your phone such as your driver’s license and W-2 instead of submitting them in person.
Drawbacks to Online Mortgages
Unfortunately, there is not going to be as much personal service with an online mortgage. Some St. Louis home buyers need one on one assistance. Even though online lenders typically employ loan officers you can speak to over the phone, they are generally only going to be available during business hours. Loan officers at regular banks may be available on nights and weekends and you can speak to them in person rather than over the phone.
Online mortgages usually work best for simple typical loans but are not so good for complicated home loans such as a FHA loan or a loan for someone who is self-employed. Online lenders are national and won’t have specialists for your local St. Louis market, so they may miss local St. Louis home buyer’s incentive programs that could save you money. If your mortgage needs are unusual, you may want to choose to work with a local mortgage broker.
You have to be careful not to be lured into online mortgage scams. Make sure to check that online mortgage lenders you are considering are registered with the Better Business Bureau. Don’t give away any personal information until you verify this.
Online mortgages can’t be beat when it comes to convenience and speed. In addition, they can often come at a lower cost than traditional home loans. However, online mortgages still aren’t the best option for every St. Louis home buyer.
If you need more personalized service or have complicated loan issues, you may wish to work with a local St. Louis bank instead. Research your options carefully before choosing whether an online mortgage is right for you.