Finding the Top Online Mortgage Lenders | What You Need to Know

Finding the Top Online Mortgage Lenders | What You Need to Know

So, you’re ready to buy a home. Maybe it’s your first one or the next in your series of rentals, or maybe you just need to refinance the one you already live in.

However, you, just like most other people, are probably so busy keeping up with your hectic lifestyle that you may be spending very little time on important decisions, such as purchasing a home.

It can definitely be an overwhelming experience to buy a home these days. Have you considered filling out a mortgage application online?

Fear not! This article will tell you more about online home loans, which can be a great tool for people trying to save time and money. We’ll teach you what you need to know prior to looking for online mortgage companies, how to choose the best mortgage application online, and we’ll even list some top online mortgage lenders to make your life easier.

Let’s get to it!

What Should I Know Before Looking for an Online Home Loan?

According to NerdWallet, there are a few steps you need to take before applying for online home loans. The first of these is that you need to make sure your credit score is as high as possible. The higher your credit score, the more control you have over the type of online mortgage quote you can get.

Image Source: Pixabay

NerdWallet states, “A low credit score signals that lending to you is risky, which means a higher interest rate on your home loan. The higher your credit score and the more on-time payments you make, the more power you’ll have to negotiate for better rates with potential lenders. Generally, if you have a score under 580, you’ll have a tough time qualifying for most types of mortgages.”

What that means is that a low credit score can not only make it hard to get an online home loan application approved, but it can even cost you more money in the way of interest. So what should you do if your credit score isn’t the best but you still dream of buying your own home?

You’ll want to build your credit score. The first step is to get your credit scores from the three major credit bureaus: Experian, Equifax, and TransUnion. They will give you your credit score for free once per year.

Once you have your credit reports, make sure that all of the information on them is correct. If there are mistakes, get them corrected by contacting the credit bureaus. But if everything is correct, try to get high balance debts and your overall debt level paid off. Once you have your credit in line, you’ll want to figure out what the best online mortgage is for you.

Familiarize yourself with the types of online mortgage companies that are available to work with. NerdWallet lists them thusly:

Credit unions: These are financial institutions which are member-owned and typically have favorable interest rates to offer shareholders. A large number of them have more relaxed membership regulations, so it shouldn’t be too difficult to find one to join.
Mortgage bankers: Bankers which are employed at a specific financial institution and who package loans to be considered by the bank’s underwriters.
Correspondent lenders: They are usually local mortgage loan companies who have the necessary resources to form your loan but will instead depend on a pipeline of other lenders, such as Chase, to whom they will sell your loan.
Savings and loans: S&Ls are now more difficult to locate, but these financial institutions tend to be smaller and quite community-oriented, making them worth seeking out.
Mutual savings banks: This is an additional type of thrift institution; similar to savings and loans, mutual savings banks have a local focus and are typically competitive.

Since not all online mortgage companies are licensed in every state, you will want to be sure the lender you’re applying to is registered in the location where you want to buy your home. You can do that through the nmslconsumeraccess.org website.

Don’t Miss: Best Bad Credit Mortgage Lenders for Bad Credit Borrowers (This Year’s Mortgage Lenders and Programs)

All-in-One Change Management Tools

Top Rated Toolkit for Change Managers.

Get Your Change Management Tool Today...

The next step is to figure out which top mortgage originators are willing to give you a loan. You will want to compare interest rates to make sure you’re paying as little interest as possible. In the long run, a lower interest rate will save you a lot of money. You can do this by putting in a mortgage application online with several reputable companies.

Of course, low interest rates are not the only important thing to consider when choosing the best online mortgage. You also want to be sure they’re reliable. Some good ways to check into this are to get recommendations from family and friends and check for online reviews. If a lender has overwhelmingly positive or negative reviews, you’ll know what you’re looking at.

Once you have a few quotes to work from, take a look at the interest rates. Don’t settle for what you see. If you have done your research, you can leverage your numbers into the lowest possible interest rates, which can save you thousands of dollars over the life of your loan.

Be sure to ask your online mortgage companies the right questions before filling out a mortgage application online. NerdWallet recommends the following questions:

“How do you prefer to communicate with clients—email, text, phone calls or in person? How quickly do you respond to messages?
How long are your turnaround times on preapproval, appraisal and closing?
What lender fees will I be responsible for at closing? (Fees may include commission, loan origination, points, appraisal, credit report, and application fees.)
Will you waive any of these fees or roll them into my mortgage?
What are the down payment requirements?”

The last step, but certainly not the least, to consider when choosing among online mortgage companies that you’ve researched is to examine the fine print. You will not just be responsible for principal and interest payments – there are also closing costs, points, loan origination fees, and transaction fees. Don’t be afraid to ask for clarification from your lender. This is your money we’re talking about here.

Finally, some online mortgage companies may want you to pay “earnest money” before they will start the loan process. Find out if the lender will return the earnest money if you elect not to work with it. If it can’t, or if the answer is vague, keep walking. Or keep scrolling, as the case may be.

How Do I Choose the Best Online Mortgage for Me?

Now that you know what you need to educate yourself on before you choose from the online mortgage companies, go over a few ways to choose the best online mortgage for you.

While looking at the top mortgage originators, it may seem like a hard choice between so many excellent companies. But really, this decision is all about you, your home, and your family, so your best bet is to choose a lender that is convenient for you.

Choosing an online lender does make things far more convenient for some people than choosing a brick-and-mortar mortgage lender. An online mortgage quote can be much more streamlined than an in-person one has the ability to be.

Money under 30 says, “For the most part, these national lenders don’t have local offices. You’ll complete your pre-approval application online and submit documentation via email, fax or mail. The best online mortgage lenders have top-notch customer service reps to walk you through the application process via phone.”

If you are new to mortgages or have lots of questions, you may prefer a local company that can meet with you in person.

Image Source: BigStock

You’ll also want to be aware of the reputations of your online mortgage companies. Chances are good that they’re reputable, but you don’t want to take chances when it comes to your money. If you notice red flags, such as many negative online reviews or bad scores from the Better Business Bureau, you’ve stumbled across a disreputable company. Do not engage.

The Top Online Mortgage Lenders

Now that you know what you need to choose your best online mortgage and you’re ready to start getting online mortgage quotes, let’s review some of the top online mortgage originators you can choose from. We’ve selected these online mortgage companies based on their Consumer Affairs website ratings. The following are rated as the best online mortgage companies of 2016.

AmeriSave

Founded in 2001, the AmeriSave website claims to have funded billions of dollars in real estate. Consumer Affairs gives it a five-star rating from nearly two thousand reviews. That’s a lot of satisfied customers. One interesting thing about this company is that it offers an online mortgage quote on its homepage in as little as one second. This is one of the top online mortgage lenders that takes reliability and convenience to a whole new level.

Caliber

Even though Caliber is just under three years old, it claims to have already completed $75 billion dollars in loans. It is headquartered in Colorado and was founded in 2013. The company has a five-star rating and over a thousand reviews. Not bad for a company that hasn’t been around for long. It is definitely doing something right. If you want to get an online mortgage quote, this may be the place to start.

Prospect Mortgage

Headquartered in Sherman Oaks, California, Prospect Mortgage has a five-star rating from about 450 people. It offers a wide range of mortgage solutions and even donates to Homes for Our Troops every time it closes a loan. If you’re interested in online mortgage companies with hometown flavor and a lot of heart, you might like Prospect Mortgage.

Nationstar Mortgage

Nationstar was founded in 1994 and is headquartered in Dallas, Texas. It has an astounding 5800 reviews and a four-star rating. But that rating is only from Consumer Affairs. Fannie Mae praised the company as having a 5-star service in 2015. This company is older, established, and has helped many, many people into their dream homes. This may be your ideal company to service your online home loans. Take a look!

LendingTree

Not only is LendingTree one of the top-rated online mortgage companies, it also offers auto loans and personal loans. It is rated as having four stars with 642 reviews. A great thing about LendingTree is that its website offers to get your credit scores for you, which can save a lot of time and effort. This is definitely a service you won’t want to miss.

Even though those are five of the top-rated online mortgage companies in the United States, there are hundreds or thousands of other great companies to choose from. If these don’t meet your needs from an online mortgage quote, you will certainly be able to find a company that can.

Getting a mortgage, whether in person or online, can be a daunting task. But you’re now armed with the knowledge you need to make an educated choice. Don’t be afraid to wade out into the Internet and fill out an online home loan application. Who knows? Your dream home could be closer than you expect.

AdvisoryHQ (AHQ) Disclaimer:

Reasonable efforts have been made by AdvisoryHQ to present accurate information, however all info is presented without warranty. Review AdvisoryHQ’s Terms for details. Also review each firm’s site for the most updated data, rates and info.

Note: Firms and products, including the one(s) reviewed above, may be AdvisoryHQ's affiliates. Click to view AdvisoryHQ's advertiser disclosures.