Should I use an online lender for my home loan?

If you are interested in refinancing your home it might be tempting to utilize the services of an online lender or a call center lender. After all, these lenders make the process sound so easy…and cheap!!  But can you really push a button and get a mortgage?

No.

Mortgage Approved?

The expectation set by being able to push a button and get a mortgage leads you to believe that there is a big computer system just sitting there waiting for your information to arrive, at which point it will quickly automatically review your data and approve your loan.  But…that is not how mortgage lending works!

An online lender simply has automated the data collection process – your loan application still makes its way into a processing queue for further review and approval by human processors and underwriters.

A call center lender is staffed with hourly wage individuals who are trained to have a conversation with you – the goal of the conversation is to get your information and push your application into a processing queue for further review and approval, again, by human processors and underwriters.

 

There is nothing wrong about these business models.

 

However it is important to understand that they have been created initially to serve a very narrow group of borrowers.  If you have a relatively easy loan to process (you have been employed by the same employer long enough to have W2’s for 2 years, you have relatively little debt, you have a healthy amount of equity left in your property after your loan is completed) then one of these options might work just fine for you.

Loan Queue??

But…if you have a little more complex financial profile – you’re self-employed, or partially self-employed, you have rental property, you have investment income, or other forms of income that must be utilized to qualify for the loan, the online and call center models are not really set up to serve you – they are about volume and meeting quotas.  A complex file takes time to understand – if a lending team can push through 3 loans in the same amount of time it takes to understand your more complex scenario, then your loan will not receive immediate attention.

At this point in the process, you represent a stack of paper (although not literally since all of your data is submitted electronically) containing data to be analyzed – not a human being with a family who needs assistance with finances.

 

But…business happens between people, not computers!

 

When you work with a local lender, like me, we live and work in your community. You have the advantage of being able to “put a face with a name” and benefit from our desire to provide excellent service to you, your family and friends.

Business Happens Between People!!

After all, if we see each other in the local hardware store after your loan is done, you can be sure I am motivated to want to have a comfortable conversation with you, and not feel the need to hide in the next aisle to avoid the discomfort of facing you after a less that happy experience.

An experienced loan officer knows how to properly package your information, select the right lender to review your loan application and advocate fiercely with the lending community to help you successfully meet your refinancing goal. And, if after reviewing your application, we find you are not eligible for financing right at this time, we also know how to mentor you to bring your finances within qualifying guidelines.

So, before you send your information rocketing off into cyberspace, please stop and consider who is really on the receiving end…a nameless, faceless computer? Or an experienced local loan officer who cares about helping you achieve your financial goals.

If you have a question you’d like me to answer regarding your home loan, please contact me by sending an email message to Linda@LindaOnLending.com or give me a call at (805) 351-3991.

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