Banking is among the oldest industries set up by humans, and will most likely continue to be one of the most important ones as well. One of the most prominent changes that has been implemented by the industry can be directly linked to the dot com boom.
Annual mortgage loans granted by online mortgage companies exceed $100bn a year. Online players are posing serious competition for conventional offline lending mechanisms. So when you feel the need for a mortgage loan, do you knock on the doors of a bank, or an online lender? The answer, as is mostly the case with financial choices, depends on what’s best for you.
The online mortgage lending advantage
Right from making you feel in control of the loan process to utilizing the best related services, online lending can be a prudent choice in several cases. Here are some important advantages:
- Anonymity –With instant messaging and email based communication, online lenders give you more privacy than offline channels. Electronic communication should no longer be considered anonymous in any way. Banks and the government have several ways of figuring out exactly who you are and what you have been doing. But you don’t need to be sitting across a table with someone who has those details at their fingertips.
- Your own pace – With an online lender, you keep the control even after initiating the request of the loan. Chat with representatives at any convenient hour, log in to the online account where you can see the status of your application, upload the necessary documents, and see all the details of the mortgage loan once it is processed.
- Comprehensive and wholesome services – Online mortgage lenders ensure that you receive specialized mortgage loan products such as Veteran Affairs (VA) loans and Federal Housing Administration (FHA) loans. That’s apart from the standards fixed and some dynamic rates for mortgages. Also, online mortgage lenders now offer a pre-approval facility, with helps when you have a nice home offer in hand.
When does a local bank make a fine choice for a mortgage loan?
Mortgage loans are financial decisions that have deep implications for many people. It’s human nature to seek more clarity at every step when faced with a monumental decision. In such situations, the ease of having a human representative to handle all your concerns and hand-hold you through the approval process could be hard to resist.
A look at some of the bright spots for utilizing a brick and mortar bank is warranted here:
- The local know-how – In many cases, especially in cities in the middle of real estate booms, local banks have close associations with primary realtors, which helps them sail through possible approval conflicts easily. For instance, local banks process mortgage loans for buyers in a particular real estate project, may already have on file many details that a buyer would otherwise need to personally furnish.
- Special lending formulas – Realtors with local contacts can easily collaborate with banks and facilitate more affordable mortgage loans for real estate buyers. This invokes a cost advantage in several cases, making offline mortgage lenders more viable.
- The human touch – At the end of the day, confidence matters, and having a human face to see and a human voice to hear every time you need to know something about the mortgage loan is something that only a conventional offline bank can offer.
With Chicago real estate prices witnessing a strong surge, the implications of securing the best possible mortgage loans becomes critical. With a basic understanding of how to choose among the best offline and online offers, you can make your home purchase more affordable.
Story by: Benjamin Roussey, dbfchicago.com Writer