Troy and Deborah went this route when they bought their home through an Internet lender. Since both worked for a Web design company, they felt that getting a mortgage through the Internet would be a convenient way to go. They both liked the simplicity of e-loan’s site and decided to give it a try.
After talking to four lenders who e-mailed them Good Faith Estimates, the one Troy and Deborah chose assigned them a personal loan representative who would handle their loan and answer any questions. The loan rep mailed the paperwork that needed to be filled out and returned along with W-2s, bank statement copies, and other verifications. The credit and appraisal fees Deborah paid by credit card and faxed a few additional verifications the lender needed. The process went smoothly, and it took about three weeks for the lender to complete and send the loan package to a local title company for closing. Interestingly, e-loan and similar Web lenders advertise that they can save you about $1,500 in lender fees. In Troy and Deborah’s case they had excellent credit, 10 percent down, and good ratios . . . a ‘‘slam dunk’’ for any lender. And when they closed, they did save about $1,370.
However, if Troy and Deborah had had less than good credit and ratios, e-loan and other similar Web lenders would have probably referred them to affiliate companies that would have tacked on lender fees that would have eliminated the savings. The bottom line is that yes, you can save money with a Web lender if you have good credit and ratios. These lenders are able to give you a good deal by streamlining the process and eliminating overhead. Passing these savings on to you eliminates many loan (line 800_ garbage fees) fees. On the flip side, if you want to go FHA/VA, have credit problems, or need an off-the-beaten-path loan, the savings tend to disappear. You may be better off with an experienced local lender with the contacts and know-how to stretch the envelope and get you approved.
A good example of this is Ryan and Wendy, who had good credit and a sizable down payment. They had found their dream home and wanted to make an offer, but the Web sites prequalified them for about $33,000 less than they needed. A local mortgage broker Ryan and Wendy contacted suggested they pay off some credit card and student loan debt to bring their ratios in line and go with a lower down payment. By getting their ratios out of the red zone and with a good credit score, they were able to qualify easily for a larger loan.
The bottom line is that if you want to get the best deal, you’ll need to compare lenders’ Good Faith Estimates. With this approach, it won’t take long before you are able to shop confidently and quickly line up the best mortgage for yourself.
After talking to four lenders who e-mailed them Good Faith Estimates, the one Troy and Deborah chose assigned them a personal loan representative who would handle their loan and answer any questions. The loan rep mailed the paperwork that needed to be filled out and returned along with W-2s, bank statement copies, and other verifications. The credit and appraisal fees Deborah paid by credit card and faxed a few additional verifications the lender needed. The process went smoothly, and it took about three weeks for the lender to complete and send the loan package to a local title company for closing. Interestingly, e-loan and similar Web lenders advertise that they can save you about $1,500 in lender fees. In Troy and Deborah’s case they had excellent credit, 10 percent down, and good ratios . . . a ‘‘slam dunk’’ for any lender. And when they closed, they did save about $1,370.
However, if Troy and Deborah had had less than good credit and ratios, e-loan and other similar Web lenders would have probably referred them to affiliate companies that would have tacked on lender fees that would have eliminated the savings. The bottom line is that yes, you can save money with a Web lender if you have good credit and ratios. These lenders are able to give you a good deal by streamlining the process and eliminating overhead. Passing these savings on to you eliminates many loan (line 800_ garbage fees) fees. On the flip side, if you want to go FHA/VA, have credit problems, or need an off-the-beaten-path loan, the savings tend to disappear. You may be better off with an experienced local lender with the contacts and know-how to stretch the envelope and get you approved.
A good example of this is Ryan and Wendy, who had good credit and a sizable down payment. They had found their dream home and wanted to make an offer, but the Web sites prequalified them for about $33,000 less than they needed. A local mortgage broker Ryan and Wendy contacted suggested they pay off some credit card and student loan debt to bring their ratios in line and go with a lower down payment. By getting their ratios out of the red zone and with a good credit score, they were able to qualify easily for a larger loan.
The bottom line is that if you want to get the best deal, you’ll need to compare lenders’ Good Faith Estimates. With this approach, it won’t take long before you are able to shop confidently and quickly line up the best mortgage for yourself.
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