One question that I get asked a lot is, “Should I use an online mortgage company or a local lender?” Today we’re going to look at the pros and cons of both options to give you a better idea.
In today’s America, you can buy pretty much anything online. This applies to clothes, groceries, and even mortgages. It’s so easy to go online, put your information in, and have an online lender spit out a pre-approval.
One distinct advantage of an online mortgage lender is that they tend to be much quicker and cheaper. They advertise low interest rates that are very appealing to buyers and they make the process very simple. However, not reading the fine print can be an issue.
Another pro of an online lender is the ability to lend to buyers with lower credit scores. However, you should realize that a lower score usually comes with a higher rate.
As far as the cons, there is a lot of fraud in online mortgage lending. Putting all of your personal financial information out there is risky, so be careful to read the fine print.
Another con is that sometimes these lenders simply advertise low rates and low credit scores just to get your information and sell it back to someone else.
Online mortgage brokers also sometimes ask you to pay a fee to pull credit upfront. Be wary of that, because most traditional mortgage brokers won’t ask for money up front.
Local lenders operate a little differently. They might take a bit longer to get you pre-approved, but they will always be working to find the best solution for you. Instead of approving you with a low credit score, they might instead suggest some simple ways for you to raise your credit and get a better rate.
A local lender, such as the ones we work with, is also great because they are constantly looking out for your best interest. They will make sure that you’re not making yourself vulnerable or paying any extra fees that you don’t have to. There’s much less risk involved, overall.
Regardless of which you choose, there are pros and cons to using online and traditional mortgage brokers. The right decision really depends on your personal situation. If you have any questions, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.