Search:

News by Subject
Complete list of specialty news sections.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Mortgage Industry News
Subscription-based news for people who work in real estate finance.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from MortgageDaily.com.

Mortgage News Reprints
Put entire MortgageDaily.com stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed MortgageDaily.com stories for your web site or for your RSS reader.

News Archives
Archive of news entries.

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Graphs
Directory of lenders, branch operators and mortgage service providers.
home advertise email RSS about us
 
HOT Topics Rates Glossary LO License Search
Consumer Mortgage News
Free mortgage news for current and prospective borrowers from a leading online mortgage industry news publication.



How to Best Utilize Mortgage Shopping Websites

The Mortgage Professor: Website features homebuyers should look for

July 2, 2015

By JACK GUTTENTAG The Mortgage Professor - Tribune News Service


Buyers who need a mortgage to purchase a home are less likely to use the Internet to find one than are existing owners looking to refinance, yet the benefits of online shopping are just as large if not larger for homebuyers.

The problem might be that homebuyers expend so much time and energy on finding the right house that they are relieved to find that there is an easy path to a mortgage -- that being shifting most of the responsibility to the loan officer recommended by the real estate agent or the builder.

Finding your own mortgage online can result in lower costs and better decisions than taking the easy path, provided that the website or sites that you shop have the right features, such as the following:
  • Posted prices: Deal only with sites that receive prices directly from lenders' internal pricing systems. These posted prices are those the lender would lock -- commit itself to legally -- on the day shown. If the site does not give you a price quote until you are contacted by a loan officer, the price may or may not be the posted price and you can't depend on it.

  • Single-lender versus multi-lender sites: Multi-lender sites are a great time-saver because they allow you to compare the prices of a number of lenders, all formatted in the same way, in a single operation.

    The downside of multi-lender sites to some borrowers is that the lenders are mainly small firms and very likely you won't recognize any of their names. If you want to select among large name firms, you must visit their individual websites and establish comparability between their different systems, which can be a major hassle that none of them try to make easy.

  • Anonymity: In my view, the best approach is to shop prices anonymously, until such time as you have made a decision to contact a lender, at which point you only want to deal with that lender. Until then, keep your ID to yourself.

  • If you price-shop multiple lenders, you must provide them all with all the information about your transaction that affects the mortgage price, but that does not include your name, email address, social security number or street address. If the input form includes such contact information, you will be besieged by multiple loan officers quoting prices that mean nothing -- except, perhaps, to identify which one is the biggest liar.

  • Complete prices: The price of a fixed-rate mortgage is the interest rate, lender fees expressed as a percent of the loan, called "points," and fees that are a fixed-dollar amount. The site should display all three components, and on adjustable-rate mortgages it should also show the margin, index and rate caps. If the prices shown are not complete, cross the site off your list.

  • Fully adjusted prices: You want the prices you shop to be adjusted for all the features of your transaction that affects the price. These are: ZIP code of property, occupancy type, property type, loan purpose, loan amount, down payment (equity), credit score, lock period and whether you want to waive escrow.

    If the price you receive from the website is not fully adjusted for all these factors, then you are pricing someone else's loan, not yours. If there is a relevant feature of your loan that the site does not ask you about, it assumes that the factor is the best possible, which generates the lowest price -- and has the largest potential for an unpleasant surprise. If the site does not ask for your credit score, for example, it most likely will assume that you have a score of 800, which means that if your actual score turns out to be significantly lower, your actual mortgage price will be higher. You won't find that out, however, until after you have applied and your loan has been processed.

  • Timely prices: You want the prices you see on the screen to be live, not obsolete. Since lenders reset their prices every day, and sometimes during the day, a system providing timely prices must be directly linked to the system that generates prices. If prices on the web must be updated through a separate process by someone who might be at lunch or out sick when the market changes, the web-based prices may become obsolete.

    To determine whether the prices on the screen are live, look for an accompanying "as of" date and time. On my site, the time shown is the time the user clicks on the "Calculate" button, because the system bases its calculations on new prices obtained directly from each lender's pricing system every time it does a calculation. Other sites may price only once a day, usually first thing in the morning, which means that a price change during the day will not be shown until the following day. If no time is shown, don't waste yours on that site.


About the Writer
Jack Guttentag is professor emeritus of finance at the Wharton School of the University of Pennsylvania.

next story

back to home page


To see more of The Mortgage Professor or to subscribe to the newspaper, go to www.mtgprofessor.com

Copyright (c) 2015, The Mortgage Professor

Distributed by Tribune News Service.


This story was distributed by TNS - Tribune News Service
 
Refinance News
News about refinance programs, pricing and production.
H A R P 2.0 News
News stories about the H o m e Affordable Refinance Program including expanded program guidelines.





Copyright © 2016 MortgageDaily.com
MortgageDaily.com Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

pricing engine directory

wholesale lender directory

More Mortgage News Resources (MortgageDaily.com full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

free mortgage news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter

MBS

mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

refinance news

reverse mortgage news

sales blog

secondary marketing

servicing news

subprime news

wholesale lenders

wireless mortgage news