Online mortgage lenders

Online lenders are a popular option for homebuyers on a strict budget — or anyone who wants to save money. With competitive rates, a wide range of products and easy-to-use platforms, they can be a great alternative to traditional banks.

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Features	Loan types: Conventional, Refinance, Home Equity, HELOC, Jumbo, Reverse, FHA, VA, USDA Minimum credit score: 620 Minimum down payment: 3.5%

What is an online mortgage?

An online mortgage lets you go through most — if not all — of the loan process virtually. You’ll typically submit your application and financial documents through email or a secure portal on the lender’s website. Though the majority of the process is online, you may still need to speak with your lender and attend the closing to physically sign the mortgage documents.

What types of online mortgages are available?

In today’s virtual world, most mortgage products can be obtained online, including:

How to choose the best online mortgage lender

There are several factors to consider when shopping around for an online lender. The best fit for you will depend on your specific financial circumstances, but always:

• Consider rates. The rate you qualify for depends on your overall financial health, but shop around for online lenders that offer competitive rates.
• Ask about fees. Some lenders charge more fees than others. Keep an eye out for origination fees, document preparation fees and other charges outside of the standard appraisal and credit report fees.
• Read online reviews. Sites like Trustpilot, the Better Business Bureau and Reddit can give you an informative snapshot of other people’s experiences with a particular lender.
• Compare multiple lenders. Don’t settle on the first good faith estimate you receive. Shop around and compare offers.

Are mortgages from online lenders safe?

Several online lenders are backed by large, well-established banks with security measures in place to protect your sensitive information. If you’re not familiar with a lender or you’re concerned about its legitimacy, check to see if they’re accredited with the Better Business Bureau (BBB) and check for complaints with the US Consumer Financial Protection Bureau (CFPB).

Online mortgage lenders vs. banks

Online lenders don’t have the overhead of operating branches and can often pass their savings on to you in the form of lower interest rates and fees. Many online lenders also offer innovative products and a range of products to suit a variety of borrowers. And with a heavy focus on tech, they’re often faster to approve loans than traditional lenders.

Are there any downsides to going with a digital lender?

• Land loans usually more difficult. Getting a loan to buy a piece of land to build a new home on is usually much more difficult than buying a home. If you plan to buy a piece of land, compare more lenders to find one willing to take the risk.

• The personal touch. Many online lenders make sure you have plenty of ways to get in touch, including calling, emailing and live chatting. However, if you’d prefer face-to-face communication, an online lender might not be able to meet your needs.

Bottom line

Finding a mortgage online gives you the opportunity to research different lenders and compare your options to find the best mortgage for you. Choosing an accredited lender with strong reviews and competitive interest rates can help you feel confident that you’re making the right decision.

Frequently asked questions

• Can I get an online mortgage with bad credit?

  If you have a low credit score, there are lenders who are willing to work you, but the rates and terms will likely be less favorable than they would if you had strong credit.

• What types of documents will I need to send to an online lender?

  Typical required documents include your driver’s license and documents providing details about your finances, savings and employment.

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