The single most important thing you must do before you can buy a home is to line up your financing. You cannot go to the grocery store without money. Neither can you buy a home without money. And where does the largest part of the money that you will need, come from? So it is absolutely important that you pay as much attention to your mortgage loan as you do to the countertops in your new home. You need to know what it costs when you buy, and later, what it will cost you every month for thirty years. You will write 360 checks to your lender and even the smallest difference in your mortgage options can make a huge difference in the long run. That is where an online mortgage company can make a big difference to you. There are two major issues for you to investigate: your interest rate and your fees and other charges associated with the new loan.

Sites that offer an online mortgage will tell you what interest rate that they charge. The competition for business will force lenders to display and offer the lowest rate that they can afford. And it gives you the ability to shop across several sites to identify the best rate. Be certain to include adjustable rate mortgages and fully understand how the interest rate for those plans changes over time. But the key point is the online mortgages will increase competition for your business. Keep in mind that a reduction of only 1/8th of a point on a $300,000 mortgage can save you almost $25 a month, or over $8,000 over the life of your loan. Isn’t that kind of money worth the effort?

Secondly, those firms that offer an online mortgage are very transparent about the charges and fees associated with a new home mortgage. There are a number of these charges, including fees to check your credit history; points that reduce your interest rates or that will provide compensation to a broker, flood certifications and many other items.

All of these charges will be imposed when you settle on the house, and will increase the amount of cash that you need to bring to the table.

Every lender, whether online or done in person, is required to provide you a summary of those expenses, and if they change for any reason, a new time period for you to examine the effect of the changes. Study those with care.

Online mortgage lenders have improved your search for mortgage options. Because you can easily look at many lenders and their products, there is increased competition for rates and complete transparency of closing costs.