Should you use an online mortgage broker? It can actually be a great idea — but you’ll want to know what to expect first. If you have a lot of questions, working face-to-face with a local broker can be reassuring.
Everyone is so busy these days we usually prefer a simplified version of everything: We’d rather text than call, and we’d rather buy Christmas gifts online than go to the mall.
So it only makes sense the newest trend in mortgage lending is full-service online mortgage brokers. Does this work for you?
The Pros
- You may Get Lower Rates and Fees
Unlike a brick-and-mortar bank, online mortgage brokers often advertise the lowest rate for a specific term available from all lenders. As a result, they might be able to pass the savings to their customers in the form of lower interest rates or lower fees. If an online mortgage broker offers you a rate that’s even a quarter of a percent lower than what other lenders offer, that could potentially save you thousands of dollars over the life of your loan.
- Applying for a Loan May Be Less Time-Consuming
If you’ve never applied for a mortgage before, it goes something like this. The lender will hand you a stack of paperwork and a laundry list of documents that you’re required to make copies of. Getting everything in order can take days or even weeks if you’re chasing down bank statements or tax forms.
Online mortgage brokers can make the process less difficult to navigate. Instead of making copies of tax returns or other financial documents, you can just upload them to the broker’s website. That can speed up the loan process and save you some headaches.
- It May Be Easier to Get Approved
Your bank has a specific set of rules and guidelines. The can only offer you their product, on their terms. Period. But individual mortgage brokers can raise the bar and look through polices and guidelines of all lenders simultaneously to see if you are a fit with one of them.
The Cons
- Getting Help May Be Harder
If you’re applying for a mortgage through a local bank or a broker, you’ll probably be able to call them at any time within business hours to get answers to your questions. With an online lender, it might be more difficult to get someone on the phone when you need assistance. It shouldn’t be the case, but it is a possibility.
- Rates Aren’t Guaranteed
Jumping on board with an online mortgage lender because they’re promising you a super low rate can backfire if it turns out that you’re not eligible for a great deal. They will advertise the lowest rate, but if you don’t qualify, they would try to qualify you for another program or with another lender, which may be at a higher rate.
Do Your Homework
If you think an online mortgage broker is the way to go, it’s best to do some research before you apply. What’s their reputation like? How long have they been in business? Are they easy to reach when you need that human touch?
Have any questions, need any advice? Visit us at www.thefinancialforum.ca. Email us at mortgages@thefinancialforum.ca. Call us at (905) 265-0246.
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