July 18, 2013
Online Mortgage Comparison Tips – Use the Internet to Find the Best Deal
Source: Buying a home is supposed to be fun, however, applying for a mortgage can suck the life out of the process. By comparing mortgage lenders and rates online it is easier to find the best deal with less stress. Thomas Sigsworth, editor at LowestRates.com, provides some advice for getting started.
I have purchased two homes in my life, each time relying on a mortgage to make the deal happen. While the real estate search process was both fun and interesting, when it came time to search for a mortgage things got complicated.
Fortunately, the process of finding and comparing mortgage lenders and loans is easier today than ever before. This is due in large part to the internet.
With the help of an online mortgage comparison website, you will find yourself learning more than you ever imagined possible. During this time, focus on these three details above all others:
- Make a list of reputable lenders, both local and national
- Pay attention to which lenders are offering the lowest rate
- Don’t be fooled by fees as some lenders charge more than others
For more information on how to find the best mortgage with the help of the internet, I turned to Thomas Sigworth, editor at LowestRates.com. Here is what he had to share:
1. Is it true that using the internet allows consumers to find the lowest rates?
Yes, it’s true – shopping for a mortgage online can save borrowers an enormous amount of time. Rather than spending evenings and weekends stuck in banks or haggling with loan officers, borrowers can simply visit one of several high quality comparison sites online to quickly find the lowest rates currently available.
And just how quickly is quick? All the borrower needs to do is plug in some details on where they live, the size of the loan they are seeking, etc., and the search is completed almost instantly. A good comparison site will display the lowest rates available to the borrower at that moment, without advertising or favoring one lender over another. Depending on the service, the borrower can reach out to the lender of their choice to complete the process, or choose to be contacted instead.
Banks rarely post their best rates on their websites, instead making borrowers negotiate and ‘wheel and deal.’ Even borrowers who pride themselves on being strong negotiators might not end up getting the lowest rate. The lowest rates at one institution may not be the lowest rates at another.
A quality mortgage comparison site, on the other hand, acts as an open marketplace where lenders can compete for your business by presenting you with their best offers right up front. Lenders know they are in a competitive environment so they post their lowest rates rather than their standard advertised rate.
If you use a high quality financial comparison site with access to the best lenders, you’ll have the satisfaction of knowing that you got a great deal. It’s no small thing – all too often borrowers go with their local bank, only to later discover that the interest rate on their mortgage is higher than it needs to be. Comparison sites ensure borrowers are being presented with the best offers right up front.
A good mortgage comparison website should also provide borrowers with a suite of educational content so that they can be informed shoppers. The content should be easy to find on the site, comprehensive, informative, and free.
2. What should borrowers be aware of when searching for lenders online?
Borrowers should exercise due diligence when shopping for mortgages online. Below are some things to keep in mind before starting your search.
How Your Information Is Used
Also make sure you provide only the information needed for a quote. If the site asks for FICO scores, household income, social security numbers, or other sensitive information, you should give the terms and conditions extra scrutiny before using the site. Make sure the site is upfront about its disclosures.
Borrowers should also make sure they understand the site’s ranking criteria for matching users with lenders. Some comparison sites allow lenders to pay for more prominent placement, and some favor lenders who advertise with them. Only use sites that let you see the best rates right up front, without favoring one lender over another.
Lastly, you’ll also want to avoid comparison sites that try to up-sell you with all kinds of other, more expensive financial products. Best-of-breed sites have a strict no up-sell policy.
Although this is a lot of information to take in, if you are serious about buying a home you need to be serious about finding the best mortgage lender.
Before you ever pick up the phone to contact a lender, go online to compare your options and to learn more about current rates. When you equip yourself with the right information, you are in better position to make an informed decision.