Second Mortgage

Does Internet Mortgage Lenders (IML) offer better interest rates than local lenders?

So you are looking for say, 30-yr fixed rate mortgage and you are concerned about long term viability and stability of IMLs? Concerned about responsiveness and lack of local representative? If IMLs are able to consistently close loans at specified rates? And wonder what do realtors think of online lenders?

Remember it’s a huge market where competition keeps realtors and local brokers on their toes. So you will hear a lot of opinions which will stop you from using the online mortgage lenders to get second mortgage or refinance your loans. But a logical consideration of facts and applying your own judgment can get you good deals off internet too.

Shop for the best rate, certainly an online lender may be able to give you a slightly better price as their salespeople may not be motivated directly by the rate they charge. Local mortgage brokers always earn more money if they are able to charge you a higher rate.

Use a reputable company, do you research. Quicken Loans, Home Finance of America (HFA), The Money Store are all relatively reputable. All major brands such as Countrywide, American Home Mortgage, Washington Mutual, also offer mortgages “online” via a centralized lending center.

Unless it is important to you to feel comfortable looking at your mortgage processors, you don’t need a local representative from the mortgage company. The mortgage company will find you a reputable local real estate appraiser and closing agent.

Certainly, IMLs can close loans at specified rates, in fact due to the lack of in person relationship, their practices tend to be under much higher scrutiny than the glad-handing local mortgage broker who will take you out for a beer after signing the papers.

They frankly don’t like them, as Realtors like to control the mortgage business. It gives them leverage with the appraisers, settlement agents and mortgage lenders, and potentially pays in gifts and incentives to become buddies with your local mortgage broker.

In general, any company can do a bad job or act dishonestly with a consumer. Online or offline. Work with a reputable company. Do your homework but don’t be blinded by the simple fact that a company may be local.