Frequently Asked Questions About Home Loans

How safe is it to shop for a home loan online?

In today’s market, the number of online home loan offers is tremendous. The vast majority of web sites that offer home loans are legitimate companies that will deal honestly with you. The main things to be concerned about are the web sites privacy policy and how they will handle your confidential information, how reputable is the lender, and what kind of a deal can they give you. In almost all cases, your information will be resold to other lenders and you will be overwhelmed with spam.


If I get a quote for a home loan online, will the actual amount that I pay vary much from the quote?

In most cases, the actual amount that you pay will be more that what you were quoted. This is because the industry is set up so that lenders can hide charges and tack on charges once you are committed to the deal and can’t turn back. The only thing you are really protected from is gross overcharges that result from a bad-faith quote.

How can I check out an online lender?

One thing you can do is to check with your state government to see if the lender is licensed to sell mortgages in your state. Another thing is to search the web for complaints about your lender. To do this just search Google.com with the name of the lender and the word ‘complaint’ or ‘problem’.


Will I be able to close escrow as easily with a home loan that I buy online?

In most cases you will be able to close escrow in a timely manner with an online lender, but as always take precautions by checking out the lender before you buy. If the lender is out of state or far away, this can lead to delays because the documents will have to be sent back and forth by mail or federal express. Check out the lender by asking for references from other customers and by checking them out with the better business bureau.


How should I compare prices on home loans online?

The main principle in comparing prices on home loans is to compare equivalent offers. This means using the same information to generate the quotes. Use the same length of loan, fixed or variable, number of points and their cost, etc. Usually when you get quotes some of these will be different from company to company, making comparison difficult. You will need to understand all of the terminology used as well as how to convert points paid to differences in the monthly payment amount.


Are online home loan websites the actual loan provider?

In many cases the online home loan companies will not be the lender itself. While some lenders have their own websites, many of the home loan websites actually just sell your lead to outside mortgage brokers who then solicit your business. You can determine if the website is a direct lender by reading their site and researching the company on google.com.


Is it safe to fill out a home loan application online?

It is generally safe to fill out a home loan application online. Just make sure that you are comfortable with the company, once you have read their privacy policy and researched them on google.com. Make sure that the web pages where you fill out your information have the secure lock at the bottom of the screen. Make sure the company is not going to sell your information to other marketing companies.


When shopping for a home loan online, can I take care of the whole process over the web?

While you can get quotes and prepare for a loan online, ultimately you will need to speak with your loan agent over the phone and then have documents sent to you which you must complete and send back to them.


How can I tell a good online home loan website from the less scrupulous ones?

The legitimate online home loan websites will provide most of what you need online, but they will also have a phone number posted. This is a sign of a larger company that uses the web as just one of their lending channels. Other home loan websites will not have a phone number, and these companies really just want to sell your information to other home loan agents.


Can I get the best rates on a home loan using the Internet?

The Internet is a powerful tool for comparing home loan prices and coverage. However, due to the complex nature of the product being sold, comparing is not always easy. Quotes may not mention things like mortgage insurance requirements, which raise your monthly payments. Other companies may make unrealistically low quotes to get you to sign up, only to add on extra fees once you are committed. This is why it is important to do some research on the web site and see how other of their users feel about that companies services.

Current Interest Rates

Bank Prime Loan Rates
 

Recommended Home Loan Websites

Freddie Mac - stockholder-owned corporation chartered by Congress to increase the supply of money that mortgage lenders can make available to homebuyers and multifamily investors.
 
Countrywide Financial - provides mortgage banking and diversified financial services in domestic and international markets.
 
Quicken Loans - compare, pre-qualify, and apply for home loans and mortgages.

Home Loan Sites on the Internet

Fannie Mae - http://www.fanniemae.com/
Provides financing for the multifamily and single-family housing market throughout the United States.