Mortgages: Local Lender or Internet Lender?

The Internet is a great source of information and the savvy consumer can get a great deal in many cases. Often, at prices that your local business cannot compete against. This is especially true with commodities, like consumer electronics, books, and clothes... In some cases service is good, other times it is nonexistent.

But what about mortgages? Are they really just a commodity? Is one mortgage just like another? Is the final product really all that matters? Is rate really the most important component? Can a company out of Texas provide just as good of a product or service as a local one? The answers to all of these are maybe.

If the most important element is rate, then just like gasoline, a mortgage is a commodity. But you also get what you pay for. Most "cheap gas" is just that...cheap! Saving a few bucks can result in the need for major repairs to your car.

But not all mortgages are alike and not all lenders are alike. The wrong mortgage at the best rate can cost you a fortune. A good mortgage professional can show you why. An average one doesn't even know what I'm talking about.

In today's economic climate it is even more important then ever to work with a professional who you can establish a relationship with. We have seen many lenders go out of business over the last year and loan guidelines have become very strict. A loan tat was easy to do several years ago could be impossible today. You need someone who you can trust to help guide you through the mortgage maze. (Keep in mind tat a lot of those "cheap rate/low closing cost loans that a lot of people got into over the last 5 years were ARMs that they are now unable to get out of.)

I am both a local lender and an Internet lender. I have made a commitment to the industry and my clients and have completed the rigorous training to become a Certified Mortgage Planning Specialist. I have clients all over the nation. I feel that I can do a great job in all situations, but I do my best work when I can develop a relationship with my borrowers and get to know their needs. This is easiest when we can sit down together for a cup of coffee and talk. I also find that it is reassuring to my clients if I am available to meet with them.

After reviewing my business, I've decided to take it even further by making a commitment to my local clients to be at the closing whenever possible. Why should I put the burden on the realtor or title officer to answer questions about the financing?

But what about those great rates posted on the Internet, or the mantra, "Everyone wins when banks compete"? Most of the sites on the Internet that advertise mortgages are nothing more than lead generation companies. If you complete a form to have someone contact you, expect to be bombarded by lenders who pay anywhere from $150 for a live transfer to $5 for a 180 day old lead. Don't Click "Continue" at Lending Tree.  Other sites post rates from different lenders who are paying a fee to get in front of you. They will often post rates that are inaccurate just for the hopes that you will contact them. Bank Rate is Feeling the Heat

Regardless, put yourself in their shoes. If you have paid good money for a lead, how aggressive would you be? What would you be willing to say to get the deal? Or how long would you be able to spend the money, tell the honest truth and watch the deal go to another, less scrupulous lender? (I no longer buy Internet leads...)

Now, do you really want to put yourself in the position of working with a lender who already has a vested financial interest in closing the loan...possibly at any cost? Do you really want to trust what could be the largest financial investment to someone that you really don't know, or have the ability to know?

My advice. Use to Internet to educate yourself, and to get an idea of what you want. (But remember that what you have spent a few hours, days or weeks learning, a good mortgage broker has spent years doing.) Then ask around for a recommendation from your family, friends or coworkers. Or try your realtor, insurance agent, CPA, financial planner, minister or other professional.