Finding your loan online
How does shopping for a mortgage online differ from getting one from a bank? Let us count the ways...
Well, to begin with, you can comparison shop several loans at once, without a great deal of effort. This is similar to the services that a mortgage broker might offer you -- but you get to do it without leaving home. In addition, because it's on the Internet and laid out neatly, you can more easily compare apples to apples. This is more difficult when you're going from bank loan officer A to bank loan officer B.
You can do it whenever you want, even in the dead of night (if you should be so inclined). Since you have a wide range to choose from, you're not limited by the mortgages from one particular bank.
You may like the impersonal nature of the inquiry: You don't have to go and stare across the table at a loan officer.
You don't get to go and stare across the table at a loan officer. That is, you may find it a bit impersonal for your taste.
Similarly, if you're not comfortable using the Web, you probably won't be comfortable exploring mortgages by clicking hither and yon. If need be, though, we gently suggest you find someone who's Web-savvy to give you hand -- if only to arm yourself with information for the moment you go in to your local bank or mortgage broker's office.
If you have special circumstances, either related to you personally or to the specific kind of loan you might need to have tailor-made, you're probably better off speaking to a real live human being. Keep in mind, though, that most online loan aggregators have personal representatives who will work with you over the phone. It's just that they may not be as experienced in more complicated loan situations.
Things to Watch Out For
These tools, as you might say to your five-year-old when she starts flicking the light switch on and off, "are not a toy." In fact, you don't want to comparison-shop just for fun. Each time you give an online lender your social security number, they may do a credit check. And if that happens repeatedly, you may be harming your credit rating. That's because lenders who see that a customer has been applying for a lot of loans may conclude that they're actually in dire straits -- and therefore are a bad credit risk.
Is there a way for you to protect yourself? Yes. Credit scorers will disregard inquiries made within 30 days after you've been given a credit score. Perhaps more importantly, they regard inquiries within any 14-day period as a single inquiry. So, if you want to protect your credit, get your mortgage shopping done within a 14-day period.
Even if you're not ready to apply for a loan right away, these mortgage aggregator websites can be quite useful as information-gathering tools. In most cases, you can get an idea of the rates that might apply to your situation before you enter any personal data. For a more exact quote, you'll have to provide some detailed personal information -- which means they will most likely make an inquiry into your credit rating.