CONSUMER EMPOWERMENT VIA THE WORLD WIDE WEB
Q. To what degree has online access empowered consumers in the mortgage Ioan process?
To an incredible degree. In fact, latest statistics from the National Association of Realtors® (NAR) estimate that more than 80 percent of all buyers begin their mortgage (and homebuying) hunt online! Not only can consumers peruse the vast choices in loan types, lenders, and available properties, but they can do so in anonymity in the comfort of their own homes.
Q. What’s the most time-efficient plan for a homebuyer who wants to check out the Web?
Here’s an approach l’ve found simple and helpful. If you’re a first—time homebuyer (or it’s been a while since your last purchase), check out information-gathering sites such as www.interest.com and www.realtor.com.
On your initial trip, don’t get bogged down filling in time-consuming forms and micromanaging your visit. Your initial mission is to gather enough information to feel comfortable about homebuying and get a
flavor for the online marketplace.
Next, visit several of the interest rate and mortgage sites, www.lendingtree.com, www.hsh.com, and www.eloan.com. If you’re feeling comfortable enough with the process, go ahead and try one of the “how much home can you afford?" calculators you’ll see and check out your credit report online by accessing www.annualcreditreport.com.
Q. Once you have gone that far in the online process, is it wise to go ahead and make a formal application for a mortgage at that time?
It’s your call and it should be based to a large extent on what you feel comfortable with. Some buyers feel more comfortable providing the site with their e-mail address, name, and telephone number so that a real person can contact them or can fax or e-mail back possible loan options. Others don’t mind filling in screens full of information. Much of that information, however, is rarely at your fingertips when you’re sitting in front of a computer screen.
Many mortgage sites allow you to send them a streamlined, skeletal application that includes your name, telephone number, e-mail address, best time to call, approximate income and debts, and the state in which you wish to buy property. By using the online qualifying calculators and this approach, you can get an idea of what you can afford, but the detail gathering is still in the hands of the lender.
Q. What about Internet safety when transmitting personal and financial information about yourself?
While most mortgage companies use encrypted transmission to send personal information (turning it from text to a secure code), some people are still leery of online security. But think about this: Information about your credit, medical history, and far more personal buying habits is freely circulating around the planet. So Web security could perhaps be one of your least personal worries!
Seriously, if you have any doubt about the security of the site or the ultimate destination of any information you might submit, either (1) do nothing or (2) use only your e-mail address initially until you can gather
further information.
Q. What are the cautions when mortgage shopping online?
Consumers should remember that there’s no Web God of Mortgaging who patrols the information, guarantees the source, or even checks to see if the information is current (though most mortgage companies do keep rates current on their sites because it’s their stock—in—trade). Each borrower should double—check the accuracy, timeliness, and availability of the information as it applies to his or her specific needs.
Q. What about obtaining a mortgage from an online interstate lender?
Loans originated online and closed in another state can require an even higher level of troubleshooting. Forms and disclosures must be state—specific, based on the location of the property not on the state where the loan originates. It’s not uncommon for interstate lenders to overlook a state-specific form or a nuance of title, for instance requiring a second set of signatures on documents. Some interstate lenders will send you documents to sign, have notarized, and return. Others will select a title company in your area to close the transaction. There are even some lenders who merely hire a notary public in your area to show up at your door with the documents for you to sign. For your own protection, you should close with a knowledgeable closing officer (i.e., title company) or attorney or at least have a local professional review the documents prior to closing. You must protect yourself against signing mortgage documents that don’t meet the legal requirements in your state and/or create a title error.