How does it work to use an "online" mortgage company? (PMI, loan)
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I guess I am a bit of a skeptic, but I have a hard time doing something as big as a refinance with a company I can not see face to face. Today I received a good rate 4.125% paying 1 pt (i think, at least better than my current lender BOA, who offered 4.75% paying .75 pts) with a company who contacted me from some online inquiries. This company informed me that they could have a notary come over tomorrow with the paperwork to go through and sign. Is this typically how this is done with 'non-local' companies? I feel that we will be pressured into signing something we have not had a chance to look over very carefully. What would our obligations be if we did sign the paperwork? All the info i received over the phone seemed legit, and the rate difference between BOA is significant. Just not sure why I feel like I am gambling if i go this route? Can someone ease my mind?
I encourage you to ask for a Good Faith Estimate on what they are offering you. It isn't a good idea to sign any paperwork without having an idea of any possible hidden fees or variable interest, etc. There has to be a reason why an online lender can offer a "better" deal than a national lender. You may want to ask if there is a prepayment penalty. If you decide to sell in 2 years or so, will you be penalized? Also, have you researched the company--a quick google search will give you reviews. Pretty rushed to be willing to have a notary to meet with you to sign. One thing about putting you info out there for quotes from lenders--they know more about you than you know about them. Make sure you have a fixed income. Bottom line, if you feel uncomfortable, there's a reason for it.
Don't use any mortgage company you don't feel comfortable with. This is a huge financial decision. And they have to give you a GFE within 3 days of app. It's the law.
We used an "online" company for out first mortgage. There were no problems. These companies bundle loans and then sell them to the big banks. Wells Fargo now handles the loan we have.
Research the company you are using to make sure it is legit but the practice of using an "online" mortgage provider is not in itself is not a big deal.
I prefer bank, so I can see the loan manager in person
^^^^This exactly.
Nothing beats face to face transactions, online you will be required to email/fax documents, they are apt to get lost as you will not know who receives them, who has access to them and where they will go, for all you know these people could be in a third world country.
I have never heard of a notary coming over to sign anything, first they run a credit check, you are required to submit your employment, salary, home insurance declaration, they do a fly by appraisal, then you get a preliminary disclosure and good faith estimate with and estimate of settlement charges and loan term, underwriters require two waiting disclosure periods, 7 day waiting period after you are approved before you sign then there is a 3 day rescind waiting period after you sign. Then they cut the check/s.
Their personnel turnover may be high as well, and you will probably not be dealing with the same person. Perform a google search on the name of the company followed with the word complaints/ripoff/scam and see what turns up. I personally would not do it, good luck.
I guess I am a bit of a skeptic, but I have a hard time doing something as big as a refinance with a company I can not see face to face. Today I received a good rate 4.125% paying 1 pt (i think, at least better than my current lender BOA, who offered 4.75% paying .75 pts) with a company who contacted me from some online inquiries. This company informed me that they could have a notary come over tomorrow with the paperwork to go through and sign. Is this typically how this is done with 'non-local' companies? I feel that we will be pressured into signing something we have not had a chance to look over very carefully. What would our obligations be if we did sign the paperwork? All the info i received over the phone seemed legit, and the rate difference between BOA is significant. Just not sure why I feel like I am gambling if i go this route? Can someone ease my mind?
I've moved 4 times since 2005, and each time I used an on line vendor. I've never had any problems. I get why people may want to see and touch and be able to stop in the office of their lender...but like any product sold over the internet, the local/face to face touchy-feeling is going to cost more.
Case in point on my recent home purchase this year. I stopped in 2 local banks - Bank of America and PNC Bank. In the case of PNC, they weren't even aware in the local branch that they underwrite 80/10/10 loans to avoid PMI.
I couldn't get my local PNC branch to offer me a 80/10/10 although one of their agents I got from their website who was across the country was able to pre-approve me in 10 minutes.
In the end, I went with an online lender because their rate was much better and they gave me a massive credit at closing.
I think the more important decision is not your lender, but the title company you use. In that case, using someone local and knowledgeable will make all the difference.
To each their own I guess.
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