The rise of online mortgage lenders has drastically changed the landscape of the home-buying process. Without ever leaving your couch, you can now compare mortgages or get approved for financing with little more than a few clicks.
But when it comes to large and delicate financial decisions, like purchasing a house, are digital mortgage brokers always the best option? Do local mortgage lenders still have any value? How can you know which one to choose when it comes time to make a move on your dream home?
The answer may all depend on your personal needs and situation. Both online and local mortgage lenders are reputable and viable options today, so your final decision may be less about pros and cons and more about simply who can offer you the best home mortgage rates at the time.
Nevertheless, here are a few key considerations to bear in mind when shopping for mortgages in either the digital or physical realm.
- Online Mortgage Lenders: Pros
Convenience is perhaps the biggest thing asset digital lenders can offer. Most sites can be accessed from anywhere, at any time. Just plug in your information and go. Additionally, online lenders are attractive to buyers because they can often find lower or more flexible rates than local mortgage companies bound to an office. While most lenders want to see a minimum credit score of 680 for regular loans or 620 for FHA home loans, online lenders are often more lenient than brick and mortar institutions.
- Online Mortgage Lenders: Cons
The mortgage process can be intimidating if you’re not sure what you’re doing. A customer support helpline is not going to be as beneficial as a person who’s with you every step of the way. Be wary of exactly how you enter your information on digital loan sites; one misstep could significantly impact your rates.
- Local Mortgage Lenders: Pros
Working with a local company has the advantage of familiarity with the area. Mortgage companies in Chattanooga, for example, understand the real estate situation of Chattanooga. Many mortgage brokers also come by way of reference from the real estate broker you’re already working with, offering an increased sense of trust and dependability.
- Local Mortgage Lenders: Cons
Besides having to get off your couch, local mortgage lenders run on standard business times, which may inconvenience many working people — especially if you need to move quickly on a home offer. When shopping for a mortgage, you also need to lock in numbers as soon as you are comfortable with them. The speed of the digital age has so strongly affected all areas of business that some local places might find it hard to keep up.
Major changes have occurred since the rise of the modern American home mortgage market between 1949 and the early 21st Century. Online lending is a new and easy way to get approved for a loan, but that doesn’t necessarily make it the best way. Assess your needs and try both a digital and in-person approach to the mortgage process to see which best suits you.