When shopping for a mortgage you have a variety of choices when it comes to lenders. There are traditional banks and credit unions, brick and mortar mortgage companies, and online lenders. All have their advantages; however, how do you know which is right for you? Here is why the Internet will simplify your mortgage search and save you money.
The Internet Makes it Easy
When your grandparents needed a mortgage they drove to their bank and sat in front of the bank s loan officer. It s the twenty-first century; you will never have to visit a loan officer if you don t want to.
By shopping for a mortgage online you can compare offers to find which is best for you. You don t have to take some loan officer s word that you re getting the best deal. All of the information including the application is available online. You will also find out if you have been approved very quickly; many lenders will FedEx you the paperwork and you can close on your loan in a matter of days.
You Will Save Money
Using the Internet to find a mortgage saves money. Online mortgage lenders do not have the overhead that traditional banks and mortgage companies do. This allows them to be much more competitive in their loan offers. Using the Internet to shop for a mortgage you will be able to find mortgages with low fees and better interest rates.
Shop for your Mortgage Smartly
It is possible to close on an Internet mortgage in a matter of days. This quick turn-around leaves a lot of room for errors. Many homeowners are so wrapped up in the home they are purchasing they skimp on the details with their mortgages and make costly mistakes. When the euphoria of the new home wears off they realize the mistakes they made, too late.
One common mistake is accepting a mortgage with a prepayment penalty. If you find out twelve months down the road that your current mortgage was not such a good deal, a prepayment penalty could prevent you from refinancing the loan. This prepayment penalty can be a hefty fee; some lenders charge as much as six months worth of interest on 85 percent of the original loan balance. You should never accept a mortgage that has a prepayment penalty; in today s competitive market there is no reason for it.
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