Hector Valadez

NMLS # 1417843

210-286-6905

havaladez@hotmail.com

Hector Valadez President & Broker

Is Applying for Mortgage Online a Good Idea?

Is Applying for Mortgage Online a Good Idea?

You can do pretty much everything on the Internet today, including apply for mortgage financing. Just because something is digital, does that automatically mean it’s better? There are several factors to consider when deciding between applying online or in person. 

Because the Millennial generation is now at the prime age for homebuying, their preferences are influencing the mortgage industry. The National Association of Realtors reports that in 2018, millennials bought more homes in the U.S. than any other generation. This age group grew up with computers and the Internet and they love and expect the convenience of doing most things online. In response many mortgage lenders have created online applications for home loans and some companies even offer “digital mortgages’ that process applications, documentation and underwriting completely online. Digital Mortgage Benefits These online mortgages are designed to make the process easier and quicker. A report from the New York Federal Reserve found that online-only applications can reduce the mortgage processing period by 20% compared to traditional options. 

Being able to upload all the important documents from home is another benefit of digital mortgages. If you have online access to your bank statements, W-2s or tax returns, you can simply import them into your online mortgage application. No more searching through paper files to find what you need. 

With online applications, you are even allowed to digitally sign or “e-sign” your mortgage paperwork – all from the comfort of your own home! 

Digital Mortgage Concerns 

Applying online for a home loan may not be the best solution for borrowers with special financial conditions. For those with inconsistent income or low credit rates, dealing with a lender in person will allow borrowers to explain all the extenuating circumstances. In these cases, additional paperwork is often needed and sometimes the loans need to be manually underwritten. 

Whether you apply for a mortgage online or with a more traditional route, you should realize that the process takes time for a reason. There are lending standards set by the government to ensure that both borrowers and lenders are protected against unfeasible home loans. That is why proof of income and assets are required and why a borrower’s financial situation is thoroughly investigated before a loan is extended. And that process takes time, no matter how you apply. 

In the end, the steps are the same for obtaining a mortgage. You may be able to save some time by applying online but find out if that service comes at a cost. As our world continues to become ever more digital, we can expect to see all mortgage applications eventually handled online. Until then both digital mortgages and traditional avenues provide borrowers with good home loan choices.