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Should I Consider an Online Mortgage?

Dec 17, 2021, 11:00 AM by Kevin Sunderland
When looking to apply for an online mortgage loan, homebuyers are typically seeking a streamlined lending process that’s less complicated, convenient and quicker to obtain than a traditional mortgage application.

When looking to apply for an online mortgage loan, homebuyers are typically seeking a streamlined lending process that’s less complicated, convenient and quicker to obtain than a traditional mortgage application.

As a result of the COVID-19 pandemic, essentially all mortgage lenders now offer online mortgage services. Whether borrowers choose an entirely online mortgage process or a mortgage loan from a local bank typically depends on their access to a scanner (or smartphone) and high-speed internet, as well as their familiarity with the mortgage application process. Borrowers who choose a traditional lender can often still start the mortgage application process online.

According to a survey from mortgage automation company Ellie Mae, nearly three-quarters of homebuyers now apply online. Millennials ignited this rise of online mortgage applications. In 2018, they bought more homes than any other generation, according to the National Association of Realtors. The pandemic accelerated the trend, turning online mortgages into a mainstream lending method.

Choosing an online mortgage lender

Borrowers should place interest rates and favorable loan terms at the top of their mortgage priority list, along with quality customer service from a lender.

Since many online mortgage lenders operate without much overhead cost, they can pass on savings to customers through lower interest rates or lower fees. However, if a mortgage loan deal seems too good to be true, consult with an expert to ensure there aren’t hidden fees or conditions that obscure the true costs of the online mortgage.

Before you apply for an online mortgage, do your research about the various lenders you’re considering, and find out if consumers have filed any complaints. Then, compare the rates and terms each offer homebuyers with your credit score, debt-to-income ratio and preferred loan terms.

While both traditional and online mortgages require the same documentation, the process for submitting and reviewing that information differs. Unlike a bank or credit union’s traditional lending process that requires customers to sit down with a mortgage loan officer, online mortgage lenders allow borrowers to search and secure rate quotes, complete an application and provide documents virtually. Instead of making copies of tax returns, paystubs or other financial documents, borrowers can easily scan and upload them to a lender’s website for a speedier loan process.

Some online mortgage lenders also offer an app, allowing consumers to apply, monitor and pay their loans from a mobile device.

If you want the convenience of an online mortgage with the same face-to-face service of a local bank, First Merchants can deliver.

To learn more about mortgage options, call us today at 1.800.205.3464 or find a banking center near you.