Should You Use an Online Lender? - Baird & Warner
Baird & Warner, Finance

Should You Use an Online Lender?

Online mortgage lenders are becoming more and more popular as they tout low rates and speedy approvals. But are they really a good alternative to a brick and mortar lender?

“The mortgage process can be tricky and often requires problem solving and restrategizing. If you don’t have that expert loan officer in your corner to give you personalized customer service, you may not be getting the best financing options or your deal could take a wrong turn,” said Steve DiMarco, president of Key Mortgage Services, Inc. “At the end of the day, the cons of these online mortgage factories far outweigh the pros.”

Many online mortgage originators offer instant preapprovals for users. These preapprovals are typically generated by a computer, not a loan officer, and are based on a broad set of standards. The information the prospective borrower enters is not necessarily what the mortgage underwriter will use, potentially giving you false expectations of your actual loan approval. In working with a loan officer, you will get a better picture of your financial health and the available opportunities so you can make the smartest decision. You may even find out there are steps you can take to make yourself a more attractive buyer.

Online Application Process
Regardless of how you apply for a loan, mortgage applications require a ton of paperwork. It might seem easier to use an online company, but if you have questions about any of the forms, there isn’t someone immediately on hand to clarify. Even if there is a 1-800 number, you’re mostly going to end up speaking to someone at a call center who isn’t familiar with your financial background.

Interest Rates and Fees
Online lenders may appear to have have lower fees and interest rates because you aren’t working with an individual who is locally based, experienced in the homebuying process and available to answer your urgent questions at 8 p.m. A broker will work with you and your individual goals to recommend a variety of options and programs to suit your financial needs, saving you money in the long run.

Remember that a face-to-face loan process doesn’t mean there isn’t room for innovative tools to enhance your experience. Key Mortgage offers a hybrid of secure online applications with a mortgage professional who will review your information prior to submission to ensure you are taken care of. Additionally, the new Key Mortgage Loan Tracker app will keep you informed and in contact with your loan officer throughout your entire mortgage process.

Additionally, through the Key Mortgage Second Opinion program, a Key Mortgage loan officer can provide you with a second opinion on any preapproval so you know you’re getting the best deal. All clients who use the Second Opinion program, whether they finance with Key Mortgage or not, will also receive a $100 Visa gift card.

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