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Is Applying for Mortgage Online a Good Idea?

Is Applying for Mortgage Online a Good Idea?

February 19th, 2020 | Mortgage

You can do pretty much everything on the Internet today, including apply for mortgage financing. Just because something is digital, does that automatically mean it’s better? There are several factors to consider when deciding between applying online or in person. 

Because the Millennial generation is now at the prime age for homebuying, their preferences are influencing the mortgage industry. The National Association of Realtors reports that in 2018, millennials bought more homes in the U.S. than any other generation. This age group grew up with computers and the Internet and they love and expect the convenience of doing most things online. In response many mortgage lenders have created online applications for home loans and some companies even offer “digital mortgages’ that process applications, documentation and underwriting completely online. Digital Mortgage Benefits These online mortgages are designed to make the process easier and quicker. A report from the New York Federal Reserve found that online-only applications can reduce the mortgage processing period by 20% compared to traditional options. 

Being able to upload all the important documents from home is another benefit of digital mortgages. If you have online access to your bank statements, W-2s or tax returns, you can simply import them into your online mortgage application. No more searching through paper files to find what you need. 

With online applications, you are even allowed to digitally sign or “e-sign” your mortgage paperwork – all from the comfort of your own home! 

Digital Mortgage Concerns 

Applying online for a home loan may not be the best solution for borrowers with special financial conditions. For those with inconsistent income or low credit rates, dealing with a lender in person will allow borrowers to explain all the extenuating circumstances. In these cases, additional paperwork is often needed and sometimes the loans need to be manually underwritten. 

Whether you apply for a mortgage online or with a more traditional route, you should realize that the process takes time for a reason. There are lending standards set by the government to ensure that both borrowers and lenders are protected against unfeasible home loans. That is why proof of income and assets are required and why a borrower’s financial situation is thoroughly investigated before a loan is extended. And that process takes time, no matter how you apply. 

In the end, the steps are the same for obtaining a mortgage. You may be able to save some time by applying online but find out if that service comes at a cost. As our world continues to become ever more digital, we can expect to see all mortgage applications eventually handled online. Until then both digital mortgages and traditional avenues provide borrowers with good home loan choices.

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Prime 1 Bancorp, Ltd is not affiliated with any government organization or bank nor do we act on behalf of the FHA or VA. This material is not from HUD or FHA and has not been approved by HUD or a government agency. We are not a Federally chartered or State Chartered Bank. We are an we are an Illinois Residential Mortgage Licensee by the Office of Banks and Real Estate License #MB.6761138, a Colorado Registered Mortgage Brokerage by Division of Real Estate, a Florida Residential Mortgage Brokerage Licensed by the Office of Financial Regulation License #MBR1930 dba Prime 1 Mortgage Inc, a California CFL Licensed Mortgage Brokerage by Department of Business Oversights 60DB055973 and a Texas SML Licensed Mortgage Brokerage by the Texas Department of Savings and Mortgage Lending. Prime 1 Bancorp, LTD Corporate Office is located at 2720 S. River Rd Suite 50, Des Plaines, IL 60018 our Toll Free Number is 888-205-3737. NMLS: 1434638

Loan product availability is subject to qualification of the borrower and loan approval after full review of the file. Not every applicant qualifies or is eligible for every loan program. Some loan products may not be available in all states. Loan approval, note rate and annual percentage rate are dependent on factors including, but not limited to, credit, collateral, income, assets and overall financial history. Not all applicants will be approved for a loan. All loan programs, terms and annual interest rates are subject to change without notice. NMLS: 1434638

Figure: 7 TAC §80.200(b)

"CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A COMPANY OR A RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550.

THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED RESIDENTIALMORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV.