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Featured Topic! Five hidden problems with getting your mortgage via the
Internet (Note: This article is a reprint form the
Portsmouth Herald) By Karen Wimer, Branch Manager, Bauer Mortgage Group karen@bauermortgage.com,
603-430-7729 The Internet is a wonderful
thing, but it’s had some strange side effects. Consider, for example,
people going to a heath information site such as WebMD. They look up symptoms
and often self-diagnose -- though we all know that most medical diagnoses
requires trained professionals. That’s a dangerous way to live. But the
Internet can be equally as dangerous when it comes to your money and your
mortgage. In the same way you ask a doctor to help with health problems, you
should ask a professional mortgage broker to help you with financial
decisions. After rescuing a few Internet-mortgage-transactions gone bad, we’ve learned some of the scariest hidden
problems. You don’t always get the full story on
interest rates. We know many people
who track interest rates online, thinking they’re going to “time
the market.” But what you don’t always know is which financial or
world events affect mortgage interest rates. Certain federal announcements
have a major impact on rates, literally within hours. We know the historic patterns,
we track the events and we can help you figure out the ideal time to lock in
a low interest rate. Internet companies are out of reach. If you deal with an Internet company, get ready for
a flood of faxing, e-mailing and phone tag. If something goes awry, you can
never just go down to the office and discuss it. And, if they make a huge
mistake, they’ll never have to face you in person. On the other hand,
local mortgage brokers have an established reputation to maintain. We know
that we’ll see you around town -- at the grocery store, Home Depot or
downtown. So, we treat you like a neighbor, not a number. It’s harder for Internet companies to act
quickly. Problems often require
speedy attention in the mortgage business. A lender might require a missing
personal document, or the Realtor may need a critical signature. Far away
Internet brokers can’t do
what the locals can do -- that is, jump in the car or get on the phone and
deal with the issue quickly, so your loan can close on time and you can get into
your new home on schedule. Internet brokers don’t know the local area. Even if a company is licensed in your area, that
doesn’t mean that they have experience working with the quirky
regulations of It’s easy to lose your rate lock. When you get a mortgage, you “lock in”
an interest rate for a set period of time. The length of time we choose
depends somewhat on the terms of the sale, the complexity of the transaction
and the other parties involved. Without any local knowledge, we’ve
found that Internet brokers tend to offer short rate lock periods, so they
can offer aggressively low rates. The problem is that when something is
delayed in your loan closing, you can lose that lock and be stuck with the
current, often higher market rate. Local brokers are in a better position to
estimate the appropriate interest rate lock period, so you get a low rate and your loan closes on time. It can all fall apart -- and you’re the one
that loses. We’ve seen it
firsthand. One document is missing, so a loan can’t close. Or, a loan
close gets delayed for a week and you lose your great rate. Or, you get to
the signing table and the rates and fees are much higher than you expected --
so you either close and pay an unfair price, or you
don’t close, and you have to start all over again (and risk losing your
dream house). A local broker can’t afford to do that to you or to our
reputation -- so we won’t. Hey, we’re not
totally knocking the Internet. We use it all the time, to communicate with
busy clients via email, send mortgage estimates (including full disclosure of
fees) and research financial markets. But it’s no substitute for a
face-to-face business relationship, exceptional service and the confidence of
knowing that your loan will be handled just miles away. You can come to our
office, see our operation and you’ll see us -- and our happy clients --
all over town. In sum, the Internet is a great place to buy books, configure
a car, find an old classmate and even locate a local mortgage broker. However,
a first time homebuyer should never trust a stranger or faceless organization
with one of the biggest investment decisions they will ever make. Bauer Mortgage Group offers a free informative email
newsletter and a free First Time Homebuyers Kit with articles, educational
resources, coupons and more. Call us today at 603-430-7729 for hassle-free
mortgage estimates and many other free, helpful resources. Email us to learn more. Seacoast Bauer Mortgage Group
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