mortgage loan

The Modern Way to Find a Mortgage

The Modern Way to Find a Mortgage

More people are turning to the internet to find the right mortgage deal. Will you be one of them?


You can do just about anything on the internet now. Whether it’s booking a holiday, checking to see who’s ringing your doorbell, or sharing the twentieth selfie of the week, no one can deny that we’re living in a digital age. Naturally, the mortgage industry has had to adapt, with a large number of online mortgage brokers having popped up over the past couple of decades.

According to a recent survey by Which, around one in three homeowners secured their mortgage through a broker, with 8% of those using an online service. While that might sound like a small number, the popularity of online mortgage brokers is currently on the rise thanks to more people preferring to get things done from home and the increasing amount of time the population is spending online.

What are they?

A mortgage broker is essentially the middle man between you and the lender. They’re there to find you the right mortgage deal for your situation and can often offer advice on similar areas like insurance and protection

An online mortgage broker is basically what it says on the tin. It will compare and contrast different mortgage deals on the market, but the process is almost always completely automated. Unlike a traditional broker, there’s no shop front, no face-to-face discussions, and no “handshake” deal as such. The name should be a dead giveaway, with an online mortgage broker negating the need for a real person. While this can put some people off, it can be an excellent solution for those who’d prefer to find the right mortgage without having to leave the comfort of their own home.

Why do people use them?

While many might want to meet an actual person when getting mortgage advice, there are a number of reasons why people prefer to check deals online:

•    24-hour service: Unlike people, the internet doesn’t sleep. For people who work nights or are busy during the day, it can be hard trying to fit in an appointment with a broker, especially if they‘re only open during traditional business hours.  Since websites are available 24/7/365, an online service is great for people looking to check mortgage rates on the go or at less sociable times of the day.

•    Cost: While this varies from service to service, the same Which? Survey revealed that many people who used an online broker did so because they thought it would save them money. In most cases, you won’t need to pay to see your results, but many do also offer services to take the application further in which case you may need to pay a fee.

•    Time-Saving: If you have a fast connection, then an online service usually can show you several deals quite quickly. Many prefer not having to schedule an appointment or travel to a physical office. The website should also allow you to see your mortgage options quicker than a manual search.

•    Scope: Like a regular broker, the main draw of an online mortgage broker is the sheer scale of deals you can see. Banks and building societies aren’t going to show or advertise mortgage deals better than their own and often have limited products. The notion of being able to see sometimes hundreds of potential mortgage deals at the click of a few buttons is enticing to many.

•    No paperwork: If there’s one thing absolutely no one on the planet enjoys, it’s filling out paperwork. With an online mortgage broker, physical paper is replaced with online forms. Great for some as any mistakes can be corrected with the press of a backspace key and no tipp-ex.

•    People: This one’s fairly simple… plenty of us don’t like talking to strangers. The internet has become an excellent tool for those who either get nervous around people or who can be easily pressured by salesman or brokers into taking deals they might not be sure about.

How do they work?

Like any service, the specifics of how they work will vary from company to company, but most online mortgage brokers do generally operate similarly.

No matter the website/service you use, you will need to enter at least a few basic details like your income, age, whether you’re a first-time buyer etc. so it can work out the deals you could be applicable for. While it might not give you the most specific details, it can give you a good idea of the types of deals available to you. Many don’t take it further than this, using an online tool as a starting point and then applying on their own.

Many online mortgage brokers will have the option to take your application further, meaning you’ll have to scan the relevant documents to verify your identity.

While they can be useful generally, if you are looking to apply for a mortgage and have a more complicated situation, an online mortgage broker might not be able to find you the best deal.

When it comes to finding the right mortgage, ultimately, it’s up to you which route you take to securing one. If you’d prefer not to leave your house and like the flexibility of an internet service, then there’s never any harm in having a look at an online mortgage broker. However, everyone’s situation is different, so never limit your options, especially when it comes to a substantial financial decision like this. There are many kinds of mortgage advisers out there, so make sure to take the time to find the right one for you.

Should you invest your savings or use it to pay off your mortgage sooner?

In the present days, future retirees have a vital decision to make which could lay the foundation for future financial security during retirement, given the fact that majority of the homeowners have mortgage as the largest debt throughout their lifetime. While aging homeowners have the worry and concern of not being able to save enough money for their future, they are also anxious about paying off their mortgage loan which is the biggest liability and responsibility.

Retirees with mortgage debt are usually faced with the battle between crushing their mortgage and keeping their mortgage. The crowd of leveraged investors will all try to convince you about retaining your mortgage as they’re the ones who earn from you. So, lets’ read on the discussion which tells you about whether or not you should keep saving money or use it to repay your mortgage loan.

Paying off your mortgage loan faster

If you decide to repay your mortgage early, there are lots of advices on how you should get it done. It comes down to following the same 3 words, ‘pay more principal’. This is not a magic secret but you have to understand how it works. Paying off the mortgage principal before time is a good way of saving money as small debt reductions sum up dramatically over the life of the loan, thereby eliminating the payments in the interest rate of the loan. Here are few strategies to pay off loan fast.

  • Add principal to the monthly payment: This tip is applicable only when your mortgage doesn’t have any pre-payment penalty. You can try to offer a one-time lump sum where you devote all your proceeds from the unused jewelry, motor home, selling a boat towards making mortgage payments.
  • Bi-weekly payments: If you can’t make a single monthly mortgage payment per month, try to make half the payments every 2 weeks. As in 12 months, there are 52 weeks, this cause 26 half-payments or 13 full payments instead of usual 12 payments and there is one extra payment in a year. You can use a bi-weekly mortgage calculator to compute payments.
  • Refinance to a low rate: One more strategy is to refinance to a low interest rate mortgage while maintaining the same term of your mortgage loan. The key is not to take any money out or to elongate the term of the refinance loan. Make sure that the new loan offers a low payment with the decreased cost of interest.
  • Refinance to a short term: Yes, this would definitely mean larger monthly payments, but at the end of the day, you don’t have to pay those extra costs on interest rate. Make sure you pay back the loan as soon as you can even if that means compromising on some of your favourite things and daily habits.

Therefore, if you’re a senior and if you’re wondering about the ways in which you can pay off your mortgage sooner in order to become debt-free, you can take into account the above mentioned tips and strategies.

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Mortgage Frauds:What to Watch Out For So You Don’t Get Scammed

If you are interested in a mortgage loan modification option then you should know about the fraudulent schemes aimed at homeowners. The law enforcement offices as well as many government agencies are currently advising homeowners not to pay any money in advance for promises of mortgage loan modification since none of the lawful mortgage lenders would charge any fee in advance for this purpose. Over 3,000 mortgage fraud cases are being investigated nationwide and this is twice the amount for the same period a few years ago. To elaborate some recent mortgage fraudsters used over $100 millions dollars which they scammed to fund businesses, buy private helicopters, mansions and posh cars.

Some of the popular scams would include:

Loan Flipping: this is when a loan officer contacts you and promises to generate cash for you by refinancing your home. Although this may be true you will be then bombarded with expenses such as appraisal fees, closing costs and any other fees incurred.

Foreclosure Refinancing: this is aimed at people facing foreclosure. The loan officers will tell you that they can save your home by refinancing. They will then ask you to sign the deed in there name and they will pay the bank. Then you should pay a small monthly fee to them until that is paid off and then they will sign the deed back into your name. This never happens. If you sign over the deed you will no longer own your home and you would then loose everything.

Home improvement loans: a contractor will try to show you surveys that state that your house needs some major repairs immediately. They will help you get a home equity loan to pay for the well needed repairs. They will always know someone so they can get this loan immediately. You will then need to quickly sign many documents and once you have the loan he is paid so he disappears and you will be stuck with these payments.

There are many scams that are put in place by unscrupulous individuals and homeowners are the primary target. Some will try to trick homeowners into transferring the title of there homes into other persons names. Another one will try to get homeowners to pay a fee and then declare themselves bankrupt hoping that the court will allow them to keep the property. This is not so as the courts rarely allow such persons to keep there homes. Others will involve the charging of huge fees so as to supposedly secure a mortgage loan modification and afterward no assistance is being provided.

To protect yourself from these kind of traps you can do a few things such as read all the documents you get and will sign and make sure you understand them and all terms, use a loan officer that has been licensed by the state and take your time to think about the opportunities that will be placed in front of you. If the person is hurrying you it is probably a scam. Go slowly and make sure your questions are being answered.

Tina Smith has been working on studying the foreclosures market, helping buyers on the finer points of California foreclosed homes

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