The Internet is easy, let’s face it. The ease of use isn’t the only bonus applying for a mortgage online. There are thousands of lenders online and it’s really simple to just visit websites. However, when you apply for a mortgage online, you’re only going to get a minimum of lenders; many of whom are predatory. Knowing who has your mortgage is crucial. A mortgage is a 20-30 year relationship. It’s also helpful to understand the implications if you apply for a mortgage loan online. Every inquiry into your credit causes your credit score to get a ding for three months. So there are positives to applying for mortgage loans online; one of which is that you can find a central broker who runs your credit report once and then submits it to different lenders. Unfortunately, you may not get the best lenders on the market, only the ones the broker has a relationship with (and gets a commission from).

What is important to do online, is to research the process by which to get the best mortgage rates, terms and fees as possible. Many people who apply online aren’t aware of the tremendous fees that can be tacked onto a loan application. Some unscrupulous brokers and lenders charge a fee for the application alone. They justify the fee by the research they have to do into your credit, work history etc. However, a good lending company realizes that your interest payments over a 30 year period will benefit them more than charging ridiculous fees upfront. Don’t be afraid to walk away from a situation where the lender wants to charge excessive fees. For every lender/broker that wants to charge closing costs, origination fees, application fees etc, there is a lender that will waive those fees to get your business. Those are the best lenders. However, you’ll only be able to pick and choose lenders if your credit score, debt to income ratio, work history and other factors are good enough.

A good FICO score is essential to being able to choose the best mortgage loan. You’ll need to order a specific credit report that includes your score. Generic, free, credit reports do not contain this vital number. The cost is about $35. Armed with this information you’ll be able to determine if you qualify for a great interest rate and the best possible terms on a mortgage loan. A score above 620 is good, a score above 720 is fantastic. Generally, either of those scores will qualify for the best interest rates (and perhaps the waiving of much of the fees).

Be aware of your choices. Don’t be afraid to walk away from a deal that isn’t the best fit for you. Research the terminology; i.e. ARM, FRM, balloon payment. Check into many different lenders and, if you decide to apply for a mortgage loan online, remember that whatever broker you go through should only pull your credit report once.

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