Shopping online for a home purchase mortgage is a lot like trading stocks on the Internet.
You've got the power, but that doesn't mean you know how to use it.
If you are a first-time home buyer or otherwise lack information about home mortgages, you are better off in the hands of a broker, lender or financial advisor you trust, according to online mortgage experts.
"The only buyer -- the only consumers that I would recommend going online to get the whole process done would be someone who's got a mortgage three or four times. But if this is the first time you're getting a mortgage, you're much better off working with a local company," said Warren Myer, CEO of San Jose, CA-based BestRate.com and author of the "1998-1999 Mortgage Industry Survey".
Among other items, the survey found many consumers still prefer the human touch when it comes to certain aspects of borrowing money to buy a home.
That's because hand holding isn't among the routines programmed into the assembly-line speed and cookie-cutter precision of online mortgage systems.
"For most consumers, e-lenders aren't the best way to go for purchase mortgages," said Scott Cooley, president of Campbell, CA-based Contour Software, an electronic mortgage software maker that claims some 40,000 outstanding licenses.
Cooley, Myers and other online mortgage experts suggest those who venture into the online mortgage maze heed the following tips.
Before you venture online, consider taking a mortgage workshop, seminar, class or have a face-to-face meetings with a real estate agent or mortgage broker to get briefed on the mortgage process. That's also good advice for homeowners who are refinancing or applying for an equity loan.
Use online shopping as an adjunct to off-line shopping. Shop both online and off line mortgage brokers and lenders for the best rate before you begin completing your applications. Off line lenders know there's a new kid on the block and will compete.
Don't start a mortgage application online in one location if you can't follow through online at another where you don't have Net access at home. Online brokers use e-mail to inform you of your mortgage's progress or Internet technology to let you track your mortgage online.
Don't double dip. For each application you zip through online you generate another line on your credit report. Too many such lines could cause a rejection from a wary lender.
Choose an online broker from your state. Nearby brokers should be licensed by your state's regulatory agency and must adhere to state regulations. Problems with outside brokers could be more difficult to solve.
Check out the lender. The broker finds the loan, but a mortgage lender actually funds it. As well as checking out the broker, you should verify the lender's status with the Federal Deposit Insurance Corp. and other federal agencies that govern lenders on and off the Net. The FDIC site also accepts complaints about suspicious mortgage lender activity and offersgeneral assistance with mortgage shopping.
Put off the come-ons. The same bait-and-switch, teaser-rate gimmicks and other questionable marketing ploys that occur off line, also exist online.
Get a rate lock. Get it in writing. Electronic signatures are still a ways off and Web-page guarantees are no better than those in print.
Also See:
Brokers Gain In Future Shakeout Of Online Mortgages
Online Mortgages Not For First-Timers
Published: January 14, 2000
Use of this article without permission is a violation of federal copyright laws.
 Broderick Perkins parlayed a career in old-school journalism into a
contemporary digital news service that really hits home.
The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services.
The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home.
Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News.
Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake.
He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications.
In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com. |
