The Traditional Process
Before online applications, you used to have to go in person and fill out a variety of forms with your lender. You put in your personal and financial information and the lender uses it to pull up a credit report and any other relevant records. You also have to bring in documentation of your financial status, including tax forms, pay stubs, bank statements, and other documents.
It’s not a particularly green process, nor is it particularly convenient. It can be tough to keep track of all that paperwork and the last thing you want is to misplace a document with your private financial information on it. It’s also a hassle getting all the right documents together in the first place – miss one and you’ve wasted a trip to the bank.
Online Mortgage Applications
Quicken, one of the largest mortgage loan providers in the country, has now introduced a program that allows you to apply for a mortgage online. It’s called Rocket Mortgage. You enter a few pieces of personal information and the program does the rest, pulling data from banks and other sources to complete the application for you. You don’t have to upload anything – there’s no paperwork at all. The program will then show you mortgage loan options that match your application and you can customize them to get the right fit. The whole process of gathering your application materials and showing you your loan options can take less than 10 minutes.
Once you’ve chosen a mortgage loan, you can sign all the necessary documents online. The final closing still has to be done in person, but everything else is completely handled through the online portal.
There are a couple of other online loan programs, like Lenda and Sindeo, but this is the first widespread rollout of an online mortgage application process. In addition, the other programs are geared toward specific geographic areas or loan products (like refinancing) rather than toward all mortgage loans.
The Good, The Bad, And The Uncertain
Obviously it’s a lot more convenient to go online, type in your name, and get mortgage options delivered right to your screen. It’s quick and easy and saves you the trouble of tracking down (and keeping together) all that paperwork. However, there are a couple of potential issues with taking the mortgage application process online.
First, there are security risks. A breach or hack could compromise all of your financial information, putting you at risk for identity theft. Of course, that’s true of anything online and that same information is stored online in other places – that’s how Rocket Loan finds it in the first place.
Second, you can complete this process without ever speaking to a loan officer. That may be fine if you’re well-versed in finance, but most people aren’t experts at loans and may benefit from speaking to someone about their questions, options and concerns. The program can give you loan choices but it can’t give you loan advice. It also can’t make allowances or adjustments based on other information. A loan officer may be able to help you get a better rate because you’re about to start a new job, for example, but the program can’t take that into account.
Should You Try An Online Mortgage Application?
Taking out a mortgage loan is a big deal. It’s a lot of money and you’re going to be paying it back for a long time. You want to make sure you get the best deal possible and that you fully understand everything about the loan. So, go ahead and fill out an online application. That gives you a complete application to work with and you don’t have to track down all the documents yourself. Then, go in and speak to a loan officer about it. Ask questions about the results of your application and about the types of loans you can take out. Ask questions about what the terms mean. Ask what you can do to get a better rate. Ask if you qualify for any special programs, like HARP or HomeReady. Make sure you’re completely comfortable with the loan you’re taking out before you commit to it.
An online mortgage application can give the bank most or all of the information it needs about you, but it can’t give you all the information you need about the loan. There’s no substitute for talking to someone with experience in the field.
Mortgage Warriors Are Here To Help
If you’re having trouble with a mortgage loan, we may be able to help. Contact us today for a free case evaluation and consultation to learn about your options.