Are Online Mortgage Approval Tools Worth It?
It only takes moments to switch on the TV and see an ad for one or more online mortgage approval tools. Even if you cut cable and watch online with streaming services, you’ve been targeted. You can even avoid TV all together and just listen to talk radio and still hear these ads. We can’t escape them.
They promise quick and easy online mortgage approval tools so you can streamline your online house shopping and buy the home of your dreams. But do they really live up to their promise? Can they really do everything they say they can?
We get it. In an age where everything from refilling your prescription medication to watching movies to ordering food can be done online without ever talking to another human being, it can be daunting to consider approaching a lender to kick off your home buying process. But we are here to tell you that that’s exactly what we think is your best first move. Let’s take a closer look at online mortgage approval tools so you can see the pros and cons.
We’ll be honest, there are a few reasons that people will turn to online mortgage lenders. And they do seem like the best possible reasons when you look at them on the surface.
- Possible lower rates. Since an online mortgage tool, and the companies that back them, don’t have a lot of overhead like banks or brokers, you may be able to get a lower rate. Even a percentage point lower could save you more money. But remember, value isn’t always about paying the lowest possible rates.
- Less time spent applying. These apps are designed to be quick and painless. There won’t be mountains of paperwork for you to complete. There will be some online forms and approval can be immediate. But, as with all things, there are reasons for the thorough application process so it is important to review your options.
- Easier to get approved. One of the biggest factors when it comes to securing a loan is your credit score. All types of mortgages from conventional, FHA, VA, and USDA will have minimum requirements for loans. But an online tool may have more provisions for someone with a lower credit score that could give you better odds of being approved before buying a home.
But, with every positive benefit, there are some negative consequences you should be aware of. There are also several reasons online lenders may not be your best choice.
- Harder to get help. The online application is exactly that, an application. For the most part, you will be unable to reach a human being if you have questions or concerns about the process or your loan in general. When you go through more traditional channels, you will have access to resources and regular communication as necessary.
- Your rates aren’t guaranteed. Online mortgage tools can’t guarantee their rates. And you may be well into the process before you find out the rate you will be paying isn’t what you expected when you started. This can certainly cause long term financial problems when you were banking on one amount and suddenly have to dedicate more of your income to your mortgage.
- Internet safety concerns. Finally, while there isn’t a lot of information out there regarding the safety of your data, by applying online you’re already running some risks. Information security is big business and banks have processes in place to ensure your information is protected. But there is simply not enough information about these online mortgages to give you the same peace of mind.
For the most up-to-date, and secure and financial fit decision, call Zachery Adam and Prime Mortgage Lending, Inc. today. We can work with you to ensure you’re comfortable with every step of the process and have all the tools you need to help you buy your new home.