Online mortgages are becoming much more common, especially for first time homeowner mortgages. There are several reasons why it is becoming much more advantageous for potential homeowners to find their financing online.
First of all, there is the overall move of many business transactions to the web. Just as retail purchases and social connections have moved online, mortgages have also become a product that you can find from your home, in front of your computer. As this transition has occurred, lenders using the web as a tool have become much smarter about the process and more helpful to the potential homeowner.
But there are other reasons why this is happening. It is certainly convenient. You do not need to actually sit down in the office with the lender to complete an application. Because of volume, you may need to drop off some of the documentation required for the loan, but that can even be accomplished with the mail, or with UPS/FedEx.
There is also a wonderful consistency with an online application process that can avoid problems with the application and the loan itself. Talk to any Realtor and you will hear horror stories about homes that did not close on time, or even at all, because the lending bank has not completed a simple step, or a document is missing. When making an application there are a number of things you need to know. What are the fees? What are points, anyway? Why do points get charged to me? Can I use a gift from my parents for the down payment? What are the applicable ratios and how do they apply to me? An online application process is designed to ensure that every step is covered.
In addition, many of the mortgage providers were brokers. Brokers accept a mortgage loan application and then present the application to the actual banks that make the loan, sometimes several such lenders. In order to stay in business, they need to charge some fees for their role in the deal which sometimes makes them less competitive. In the huge debacle that has been the home market since 2005, mortgage brokers have felt the squeeze and a very large number of them have left the industry. The online mortgage lenders have stepped into the market to fill this void. Because their operations can provide the highest quality service but without some of the fees associated with brokers, the online lenders have expanded their market, including the fulfillment of first time homeowner mortgages.
For many, the online mortgages process can be the best route to take. It is easier, fits into your schedule rather than the banker, and systematically covers all of the required steps.