Updated: May 12, 2021
Both offer different benefits and complications. Weigh the pros and cons of each to determine whether acquiring mortgage loans online or through your local bank is better for you.
Online Mortgage Brokers
Full-service online lending is rapidly becoming an industry standard, with more and more homeowners and borrowers turning to online lending and loan brokerage services like Zeitro which use computer algorithms to match borrowers with the best loan options for their situation.
Lower application fees because much of the process is automated
Easier to qualify for a loan because of the huge range of options available
Competitive rates that are at least on par with those of traditional brokers
Faster processing times because documentation is stored and checked digitally
More loan options that cater to a wide variety of borrowers
Less hand-holding and depending on the company, little or no direct human contact
Increased risk of fraud because it’s easier for scammers to pretend to be an online service than to pretend to be a major bank
Before providing your Social Security Number or allowing a credit pull, ask plenty of questions, check reviews, and compare multiple offers. Speed shouldn’t be the main reason you choose to use a digital mortgage service. If you would feel more comfortable with face-to-face meetings and don’t mind longer processing times, traditional lending options may work better for you.
Applying for a mortgage loan is a stressful process. There will always be people who prefer lots of hand-holding and validation throughout the entire experience as opposed to filling out an online application alone.
Lots of hand-holding
Tailored advice and conversations because of the personal/face-to-face interactions
Easier to build a relationship with the broker
Lengthy, time-consuming loan application and processing times (typically over a month to finalize)
Limited loan options which make it harder to compare offers
Traditional mortgage loan providers will likely have to integrate online applications in order to stay competitive, especially in a post-COVID world.
Ultimately, you should choose the option that will serve your particular needs best. And whichever type of lender you choose, prioritize good interest rates over speed or ease.