If you are in the market for a new home or if you plan to refinance or re-mortgage your existing home loan, there are a myriad of options including filling out the application for an online mortgage loan. But before you do, there are some procedures in which you need to be cautious.
Online mortgage loans are a great way to find lenders who you would not otherwise know about. They are anxious for you business providing that you are qualified for one of their loan products. And that is the key. Qualifications are different at almost every lender. Some are very similar particularly within a specific region of the country. But not all of them know the market that you live in which may have specific guidelines that disallow certain properties. So before you apply or have them to a credit check, which is the very first thing they want to do - stop!
If the property that you are interested in does not qualify and they check your credit against one of the credit bureaus then your score will be "dinged" or more accurately it will lower your number. Too many of these may put you out of contention for a loan altogether if you are marginal, or at the very least cost you more in interest rates when you finally do apply.
Here is what you need to do. First do not have them do a credit check to see if you are qualified, but instead make sure that they are qualified to finance the property you are interested in purchasing. For example, if you are purchasing a condo, then many lenders have requirement that a certain percentage of the condos in the building must be owner-occupied. Whether it's 50% or 75% you need to know this before allowing your credit to be checked.
Another example is that some properties are in a flood zone, or tornado zone and many lenders will not lend money to a property without flood or tornado insurance and in some areas, it is impossible to get. So an online mortgage loan may not be your best bet in this circumstance. Only a local lender who knows the market will be able to help you with a home loan.
Next, ask a lot of questions about the lock-in, closing costs, length of time, income qualifications, terms and conditions. Most calls are recorded so you should do the same. Record your conversation and let them know you are recording it so there will be no question about accuracy in the statements made.
So before you apply for an online mortgage loan, make sure you follow some sound advice and look out for your best interest. There are, of course, many more tips that someone getting ready to take out a mortgage needs to know. The more information at your fingertips the easier it will be in the long run.
Ms. Galbraith is now a consultant and has been in the mortgage business since the late 80's. She offers many useful tips that can help anyone in need of an online mortgage or a home equity or 100% mortgage or 100% home loan at her website for finance. There is up to date news of the lenders and rates at her Direct Mortgages Blog.
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