Mortgage Shopping Online: What Are the Advantages?

House Hunting is Fun. Mortgage Shopping, Not So Much

The process of finding a new home can be enjoyable and exciting. You can spend time exploring new neighborhoods and discovering treasures like a great coffee shop or a funky boutique down the street from a house that you are considering. The process of finding a mortgage? Not so much fun.  You have to expose your entire financial history to scrutiny, not to mention the confusing haze of interest rates, points and mortgage insurance. While there is no way to totally avoid the process of finding a mortgage, doing the bulk of your mortgage shopping online can ease the pain considerably.

Search in your Pajamas

Online mortgage-related websites contain a wealth of information about lenders and interest rate averages. You can obtain an excellent overview of the available offerings and compare terms and rates between potential lenders. You also have a better idea of the lay of the land, which can assist you in the process of preparing mortgage applications. Plus, there is little not to like about being able to lounge in your pajamas in the comfort of your own home as opposed to driving all over town to visit various mortgage lenders.

Privacy and Anonymity

While there are some who would argue that there is no privacy on the Internet, shopping for mortgage rates online does afford a measure of anonymity. Potential lenders cannot guesstimate how affluent you are by the car that you drive, the clothing that you wear, or even the way that you speak.—because you can neither be seen nor heard. As a result, the quotes that you receive are more likely to be based on the actual information you present rather than the impressions or biases that a potential lender may have formed about you.

Real Time Rate Comparison

Do you know the going interest for fixed-rate mortgages? How about variable-rate mortgages – what are their present rates? Unless you read the real estate section of the newspaper religiously, and, truthfully, even if you do, you probably don’t know what the prevailing interest rates are. This is not due to any shortcoming on your part; interest rates are fluid and fluctuate significantly. Even twenty-four hours can mean the difference between less than three percent and more than four percent interest.  However, online mortgage rate shopping removes much of the worry about relying on outdated interest rate information, because many online mortgage-related websites are updated daily or even more often. As a result, you can conduct real time comparison between the interest rates offered by various lenders.

Avoid Unscrupulous Lenders

The warning “if it sounds too good to be true, it probably is” also applies to mortgage lenders. Unscrupulous lenders tempt borrowers with interest rates that are much lower than any other rates on the market. However, once the potential homeowner signs on the dotted line, he or she is hit with hidden fees and other manipulations that jack up the actual interest rate that the homeowner must pay. Online mortgage shopping can protect homebuyers from such scams.

Finding the Best Online Mortgage

Online mortgage shopping also allows you to educate yourself about terms such as refinancing, home equity and fixed-rate versus variable-rate mortgages. Online mortgage brokerages allow you to obtain the information you need to be a knowledgeable home buyer. You can also customize an online mortgage to your personal needs and financial circumstances to get the best possible deal.

Donald Ayers is a personal finance consultant. His money saving tips mainly appear on personal finance blogs and websites. Visit http://www.kanetix.ca/mortgage-payment-calculator to try a mortgage calculator.

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