The internet makes everything easier, right? You can buy just about anything from the comfort of your own home. You can also do your research or ‘window shop’ before you head out. Many people do this with cars or appliances. But what about mortgages, can the internet help you compare loans?
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You can with mortgage comparison sites. These helpful sites give you an idea of what to look for in a loan before you ever talk to someone. Keep reading to learn how they work.
The Required Information
A quick search online will turn up hundreds of mortgage comparison sites. Each one works a little differently. The idea, however, is to provide you with quotes from several lenders that help you choose the right loan for you.
Some sites require you to disclose your personal identifying information. This way they can contact you and talk with you directly about your loan needs. Other sites, however, keep everything anonymous. You just enter basic information such as:
- Your estimated credit score or credit rating
- The type of transaction (purchase or refinance)
- The down payment range
- The state the property is in
- The type of property
With this information, mortgage comparison sites can give you links or information to mortgage companies that have programs that match your criteria.
Other companies require all information including the actual sales price, real estate tax amount, and homeowner’s insurance payment. They provide the same results, though, links or referrals to lenders that may offer a program that suits your needs.
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Comparing the Offers
Once you have several offers – typically three to five, you should compare them. This could get tricky, though. Don’t just compare interest rates or just compare closing fees. You have to look at the big picture.
Look at what the loan costs over the entire lifetime. For example, a loan with a 4% interest rate sounds a lot better than a loan with a 5% interest rate, right? But what if that 4% rate came with double the closing costs? You may want that 5% interest rate after all.
The loan that works for you should be the one that costs you the least amount over the entire term. Think about how long you’ll stay in the home. If you take out a 30-year term, but will only stay in the home for 3 years, it doesn’t make sense to pay higher closing costs just to get a lower interest rate. You won’t be in the home long enough to enjoy the lower rate.
If, however, this is your home until you can’t live there any longer, keeping the interest rate as low as possible may be a good choice. Calculate how much you would save in interest with the lower interest rate over the loan’s term. If it exceeds the extra closing costs you’d pay for the lower rate, then it’s worth taking the lower interest rate loan.
Mortgage Comparison Sites Have Reviews
There’s a lot that goes into a mortgage that has nothing to do with the numbers. Your house is probably one of the largest investments you’ll make in your lifetime. You want to work with a company that is customer friendly and accommodating.
Use the reviews on the mortgage comparison sites to your benefit. Of course, read through as many as you can, not just one or two as some people have skewed opinions. But knowing what others have to say can help you make a decision. If one company is hard to get a hold of on the phone and you prefer phone contact, check other lenders. Or if a lender has a reputation of selling loans often and you want to remain with one lender, look elsewhere.
The mortgage comparison sites help you find the best deal as well as the right mortgage company for you. Take your time when choosing your mortgage company. Look at everything that the company is about as well as the terms of the mortgage they offer. Make your decision only after comparing it to at least two or more other loans so that you know you’ve got the best option for you.