Ravi Chandran
As Artificial Intelligence grows in prominence, there will be many reasons to apply for seeking mortgages online
As a truly intelligent Artificial Intelligence which can provide personal services with speed and convenience (which only humans can deliver) is still not here yet, the best way to apply for a mortgage will depend on what you want most.
The speed and convenience of seeking mortgages online, or the personal attention of a personal mortgage broker?
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The decision of if you want to discuss mortgage finance online or with a real person, either on the phone or in person, may also depend on your generation. One recent survey said that 70 per cent of millennials used an online process to complete all or part of their last mortgage application. In contrast, 55 percent of Gen-Xers did so, and 43 percent of Baby Boomers.
Overall, 45 percent of mortgage applicants completed the process entirely in person, while 16 percent completed the mortgage financing online. But no one can deny that the process of applying for a mortgage or to refinance was paper-intensive not that long ago, and you usually waited a month or more before knowing if the loan was approved. Now, the process has been streamlined by most financial institutions.
Instead of making calls or driving from bank to bank to get a rate quote, most online mortgage calculators can tell you this in seconds. After which, you can transmit all your documentation to the lender online without any hassle.
If you are seeking mortgages online, you may get lower rates and fees because they are less overheads involved in processing such applications.
While online applications are faster, they often involve more work on your part. You are the one uploading the documents and data, not a loan officer. And keep in mind that lenders are not necessarily cheaper, which is why you need to compare rates and terms.
On the other hand, if you need help with your application, most financial institutions which offer the best home loans have made it more difficult to get hold of a loan officer during regular business hours. Also, mortgage refinance online applications may not be well-suited for complex loan applicants.
Most people who are self-employed, may need to talk with a real person, as the documentation they need to submit to substantiate their application may be too complex for an online application to support.
Finally, you should know that some mortgage companies do not make loans themselves, but submit your information to third-parties to help you get the best home loans. While some of these mortgage brokers oeprate legitimate mortgage-related businesses, other may turn out to be con artists who may bombard you with emails and calls after you press the “submit” button.
One survey shows that the majority of home buyers would like to obtain a mortgage quote online, as it allows them to make fast comparison shopping. Calling individual mortgage lenders or making the rounds in person on the other hand, can take considerably longer to compile the data that you need to make the final decision with regards to the best home loan.
And also when too much time may have lapsed between the receipt of Quote A and Quote B, the comparison may become meaningless – especially since interest rates may change quite often.
But “instant” quotes can be deceptive, in that the quotes for the mortgage refinance online applications are usually only ballpark estimates. And keep in mind that interest is not the only cost of refinancing a house. There are a plenty of other fees to consider – fees that usually are not included in instant quotes.
If you want extra help with your mortgage application, you need to be in the same room as a mortgage broker, as you you are unlikely to get one-on-one customer service from an online application.
Some situations in which it is best to apply in person includes:
- When you have a shaky credit history;
- If your refinancing is somewhat complex;
- When your credit score is bad.
Always remember that seeking mortgages online may open you up for scams. Although such scams are not the norm and are easy to avoid, you could still be victimised if you are not careful. Con artists use email, phone calls, direct mail and phony websites to separate victims from their money and their personal information.
Your best defense against such con artist is to work with reputable mortgage companies which has established itself in the finance industry.
