Internet Mortgage Application Tips
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Can I Make a Mortgage Application over the Internet?
The Internet has opened many new options for making a mortgage loan application. You should understand, however, that, like the rules of real estate transfers which are still based on 18th century English common law, the requirements for applying for and closing a mortgage loan are the same as always. With that in mind, here are some tips to using the Internet to apply for a mortgage loan.
- Get your credit report and FICO score so you will be aware your current credit status. If you discover some problems, start working on them right away.
- Have some idea what your current debt-to-income ratio is, but do not figure in your current rent or mortgage payment. If you do not know how to do this, use one of a variety of mortgage calculators that are available on the ‘Net.
- While we all shop for the “best” rate for our mortgage, have a check list of other issues that will be important in both the short- and long-term (closing costs, other fees, reputation of mortgage company or lender, etc.)
- Get specific information regarding the exact documentation you will need for any source you consider applying to. Documentation levels are pretty consistent but different loan programs and even different lenders might have slightly different requirements.
- Check out the public information and reputation of all mortgage companies, brokers, and/or lenders in which you have interest. While it is frustrating and sometimes expensive to have a problem with an Internet auction site or e-commerce seller, this is “child's play” compared to a mortgage loan problem. There are a number of mortgage companies and national lenders who have had published problems in the past and you should avoid these sources if possible.
- DO NOT give your social security number or any other sensitive information to an Internet lender (or any other lender, for that matter) during your mortgage shopping. DO know your current credit profile and FICO score so you can give that information to learn what interest rate and terms you can expect. But DO NOT allow any mortgage source to pull a credit report on you until you are ready to make application. EVERY lending inquiry made to the credit bureaus lowers your credit score. That is the last thing you need at this time.
- Get firm information on how the application and approval process works with any sources you are seriously considering. Ask for a realistic approval and closing date. If either seems unreasonable, ask for clarification. For instance, if a source tells you an approval will come in 48 hours and you can reach closing in two weeks, please question such comments. If it sounds too good to be, it is!
The key, as always with a home mortgage loan, is dealing with someone or a company you trust. You cannot “return” a home loan as you could with an appliance, a TV, or a sweater. You will own it and have to live with it for a while. If you're comfortable with your lender and you've done your homework to make sure they are legitimate and reliable, you should be able to use the Internet to make your mortgage loan application.