Dangers of an Online Mortgage Lender

It starts out innocently enough, with a homeowner going online to Google: “Best mortgage interest rate” or something similar. Always looking for the best deal (like we all are), the home loan shopper instantly is flooded with thousands of paid ads, as well as over 14 million search results, all guaranteeing the lowest interest rates and the best loans. In fact, with just one click, their email will be flooded and the phone ringing off the hook with offers.

But wise consumers might want to rethink shopping online for a mortgage. Even recent articles in the Wall Street Journal, Finance under 30, etc. talk about the growing risks and dangers of using an online mortgage company for the probably the biggest and most important purchase you’ll ever make, your home loan.
Here are ten things to consider when debating using an online lender compared to a reputable and local mortgage lender:

Timelines - Online mortgage lenders can close your loan on time, however, they often can’t, and when they are out of town where do you go?
You’re just a number - Online lenders work off the business model where 80% of their budget goes into marketing. Online lenders don’t care about creating personal relationships with their clients and earning repeat customers. They don’t know you, will never meet you, and you often just represent a commission check to them.
The bait and switch - It’s well-documented that a favorite tactic used by online mortgage sites and lenders is the bait and switch, where they get customers excited about great interest rates and lightning fast closing times. In many cases, they do not deliver.
They aren’t local - Do you really want to entrust your largest investment to some website and 800 #? .
Referrals - When you use a local mortgage broker, you can easily ask around about their reputation, get plenty of local referrals, and generally characterize their work and customer experiences.
Scams, security and privacy - Do you think your sensitive financial data is safe when you’re sending it to some anonymous lending company online? In fact, identity theft, data theft and online financial fraud are the fastest growing crimes in the world; with about 1 in 8 Americans affected every year. You’re putting yourself at a huge risk when you turn to the web to do your mortgage business, and additionally, there are a whole lot of outright scams.
Lack of communication - When you deal with a local mortgage broker that you meet and get to know personally, it’s very easy to get in touch – you just call their office, email, or even ring their cell phone number in case of emergencies, even in case of emergencies and on nights and weekends. But good luck getting your online lender on the phone. They’ll sure answer your calls quickly once they are getting you committed to doing business, but then you’ll be stuck in an endless phone tree from an 800-number, unable to talk to a real person, as they have far bigger priorities – like signing up new leads – and a long list of customers to get back to first. That lack of communication could easily kill your deal or cost you heaps of money.

Contact Todd Probasco for a live, free mortgage quote in person call 708.205.2983