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Posted at 05:30 AM ET, 12/04/2012

Shopping for a mortgage online

The Internet is making everything more convenient these days and can offer some amazing deals. In the past, many believed that online convenience came at the expense of good customer service.

But times are changing as Web sites learn how to provide a better customer experience. We have seen many online companies build a reputation for excellent service, and this is becoming the rule for many online businesses, including mortgage-shopping Web sites.

Online mortgage shopping has increased significantly in the past year, according to the Mortgage Bankers Association, and this is confirmed by traffic on MortgageMarvel.com, which has risen substantially from 2011. The rise in online shopping can be attributed to many factors, including consumer convenience and increased comfort with online financial transactions as state-of-the art technology provides accurate rates, information security and identity protection.

The first mortgage Web sites were essentially Internet-based portals that drove the consumer back to legacy mortgage distribution systems. The new wave of mortgage sites functionally eliminates loan officers from the process.

Modern online shopping Web sites are similar to EBay. They provide a forum to pair lenders with consumers. Good online mortgage sites are constantly making an effort to find quality lenders and provide the best experience to consumers.  But not all mortgage-shopping Web sites are the same, so research your online mortgage-shopping site well and choose one that delivers a satisfying customer experience.

Online shopping, when you think about it, is a good way to go. It allows you to compare information from multiple lenders, and you face no pressure to go with a certain one. Online mortgage sites also offer much quicker response time. You can see real-time rates instantly, so you can avoid waiting for a return call from a loan officer and a follow-up appointment that could be days later.  Rates can increase significantly in the time it takes to submit an application with a loan officer. While the back-end process is similar to submitting an application in-person with a loan officer, shopping online can decrease the risk of rate fluctuation during the application process.

Will online mortgage services eventually eliminate traditional mortgage shopping and face-to-face applications all together? No.

Online mortgages are not for everyone, and sometimes people need a personal experience. Many people are not comfortable researching lenders online and feel better speaking to someone in person.

Another concern that many have is online identity protection. Not all online mortgage sites are created equal, so be wary of online sites that ask for your Social Security number or other personally identifiable information for a rate quote.  The only essential piece of personal information that is required for an accurate mortgage rate quote is your credit score, which does not by itself allow anyone to know your identity.

Last but not least, it is important to understand the fees that will be associated with your mortgage.  The rate and points are obviously critical, but lender and third-party fees can add up and make a significant difference in the cost of the financing.  It’s also an area in which many mortgage-shopping sites struggle to get detailed, accurate information because so many factors determine the nature and amount of closing fees. A good online mortgage site will provide and stand behind its complete and accurate disclosure of closing fees.

So, should you apply for your next mortgage online?  Do your research and feel comfortable and confident with how you choose to apply. As online shopping continues to rise along with consumer confidence in the mortgage process, the future looks bright for mortgage shopping Web sites.

 Rick Allen is chief operating officer of MortgageMarvel.com, an online mortgage-shopping Web site that provides accurate, real-time mortgage offers while protecting consumer anonymity.

By Rick Allen  |  05:30 AM ET, 12/04/2012

 
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