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Online mortgage doubts

How reliable are the online mortgage lenders, that are available online, on zillow? Are they mortgage brokers?Are they the actual lenders? where do the loan funds come from? What could be the risks of online loan rather than a local bank?
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September 04 2013 - US
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Answers (12)

Best people to ask your questions is to friends, relatives, co workers, etc that have had a recent successful experience with a loan officer. If that is not available  Zillow Find a Pro allows you to look in your area/state and review Profiles of loan officers. Look at Reviews, experience, do research on company, and select a few to discuss your scenario. A good loan officer only remains in business for years by providing superior service, and handling their business to be sure every loan is a future referral. That approach is not likely available thru a call center rep.
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September 09 2013
"How does BOA compare with other banks/credit unions for the mortgage rates and fees,closing dates etc?"

BOA, like any large bank, tend to have rates that are a little higher than what a broker can offer.  I know, I used to work for one and would always get beat on my rate.  Going with BOA is a safe move, they are a big company and they allow you to get all your finances under one roof.  Being big means things move slower, just how it is.

If you are purely looking for the best rate a broker can get that.  Anyone who disagrees probably works for a large bank.
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September 09 2013
I worked and still work for an online direct lender. My advise is do your research. I have had much success with my loans because the companies I have worked for and currently the lender I work for care about the borrower experience and closing the loan as quickly as possible. I as a loan officer work off of comission and referrals so I take pride in my work and making sure my borrowers are happy with the experience I deliver to them.

Unfortunately there are still some lenders that are like car salesman and over promise and under deliver but with all the regulations put on loan officers these days, you can research the lender and loan officer on the NMLS website to see if there have been any issues. The large lenders/banks such as BOA , Wells, etc have way too many hands touching your loan so even though they may be trusted more because of the name recognition, there service is sub-par and the loans take a very long time, over 60 days to close.

Good luck to you, best wishes and please let us know if we can answer anymore questions for you.
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September 05 2013
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Thanks very much for all responses, what all should I be asking a mortgage broker/lender before I submit an application for loan? I wanted to know if they usually have anything in fineprint which they only answer when asked about. What can I ask to avoid any unpleasant surprises? How does BOA compare with other banks/credit unions for the mortgage rates and fees,closing dates etc?
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September 05 2013

The most important thing to know about any lender is are they informing you and giving you the whole story. Many lenders especially big online lenders are "sugar coating" they just want to get you and them bait and switch. Make sure they give you access to the rate sheets and all of the information you need to make a smart decision.  It doesn't matter if they are local or long distance ask questions. More information is way better than not enough.

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September 05 2013
What about online agents? Does the same advice apply?
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September 05 2013
With a local lender you will be able to sit down and have a face to face conversation about your mortgage needs.  Local lenders will also be more familiar with the area they are in.
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September 05 2013
My advice to home buyers is to stay away from online lenders - period.  I have seen some disappointed clients who missed closing deadlines, got "surprised" by last minute changes in fees and interest rates and just plain got swindled by online mortgage brokers.  Appraisal deadlines mean nothing to these lenders. And they will send the lowest bidder appraiser out to a property - usually inexperienced and lacking in an understanding of the local market. Stay away from online lenders and avoid a lot of headaches.

But - if you are refinancing your house - go for it.  Get the lowest possible interest rate.  If they try to tool you over - you can just walk away. 
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September 05 2013
I sold a home recently that had a son who was a big shot in Quicken Loans and they told me they would not use them on their own purchase. That tells me something.

 I had a buyer get turned down a week before closing from an online lender. They pretty much just walked away, what could the buyer do? It is harder to walk away when you sit and look at them face to face.

Don't worry where the money comes from, it's the government and taxes paying it in most cases.
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September 05 2013
The biggest thing to watch out for online lenders is their sudden rise to fame. Take reviews with a grain of salt, especially those that seem to come suddenly. It's highly suspicious when someone just joins a service and amasses several reviews immediately. 

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September 04 2013
Hi-

  Good questions... best to ask the lender prior to submitting application.
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September 04 2013
"Online" lenders are just lenders that are reaching out to a larger mass...  There is not much difference in "where the money comes from"-  Most loans are either backed by HUD (Government) or Fannie Mae / Freddie Mac (Conventional)-

There are going to be local banks / credit unions that might use their own funds, but can also have different overlays or additional requirements that would make lending more difficult to obtain -

Your best bet is to talk to someone that has experience and can point you in the right direction...  If you have a gut feeling, ask questions and learn more. 

Good Luck!
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September 04 2013
 
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