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The ‘deal’ with online mortgage sites
By Riki Unrau
You’ve seen their ads on TV or on the web. They are online mortgage loan retailers promoting super low rates all at the click of a button. What more could you ask for in this age of tech savvy, increasingly disconnected consumers. But be forewarned that the lowest rate doesn’t necessarily equal savings for you in the long run. Here are a couple of reasons why.
The cost of the great rate
It is very easy to be drawn into a rate promo that no one else seems able to offer. You might ask yourself why this is. There are a couple of things to consider. Firstly, online rate sites deal in quantity not quality. These online brokers almost always slash the commission they will earn to ‘buy down’ your rate. This results in them making next to nothing off of the transaction so they will need to do many, many more in order to make a decent income. Without a doubt, this sacrifices the service that you will receive. How could it not?
Another thing to consider is the product you are receiving. Often with low rates you are giving up certain perks that would be included in a more conventional rate. Things such as being allowed to make balloon payments on the anniversary of your loan or the ability to increase your payments to pay the loan off faster. Not to mention you will almost undoubtedly be faced with much larger penalties should you wish to move before your term is up. This is where the advice of a trained mortgage broker can be an invaluable asset to helping you make a decision about what you need in a mortgage.
What service?
Some people prefer to shop online. It is a luxury that is convenient, seemingly inexpensive and easy. But the main drawback when shopping online, especially for something as intricate as a mortgage loan, is that you will not receive the service you need. As we touched on above, your online broker must deal in large volumes to make ends meet. To them you are just a number in a folder. They don’t know your kids names or how you want to start saving for their college funds. They don’t know how nervous you are to be purchasing your first home and how much you just need someone to take some extra time with you to explain the process. They don’t know what your goals are in life and they are not concerned with helping you achieve them. Once they have funded your mortgage you will most likely never speak to them again. That is not how a local mortgage broker would treat you.
If you are still convinced that dealing online is easier please keep in mind that most of the mortgage brokers in your area are mobile and can come to you if need be. And everything can be done electronically if that is what you prefer. When you deal with local business you are supporting the local economy; plus you’re getting your own personal expert that will fully educate you on your options. Bonus!
At the end of the day price is always a large deciding factor and people will continue to chase the deal. But be sure to keep in mind what that great deal might cost you given any unexpected occurrences in your life. If and when those changes in your situation happen, at least if you have an expert mortgage broker on your side, you will have someone that will go to bat for you and your family.
Can your online broker guarantee the same?
– Riki Unrau is a Mortgage Broker with CENTUM Homeward Mortgage Group Ltd.
