Mortgage Training Online
Finding out about mortgages is easier than ever on the Internet. You can browse available mortgage lenders, find out more about mortgages and compare one vendor to another. There are generally two types of websites, sites that provide information but don't offer loans (no-loan sites) and sites that do provide loans. See FindLaw's Mortgages and Equity Loans section for related information.
Before you jump into online mortgage training, it's good to go through a little training on what's out there. Keep in mind the following:
- Educate yourself about mortgages: You need to take the time to educate yourself about the entire mortgage process. If you simply browse a few sites and rely on one or two of them, there's a good chance you'll get taken advantage of. An important part of mortgage training is exploring the different types of mortgages and the process that goes into getting one. See Types of Mortgages for a general overview.
- Brokers versus lenders: Understand that many websites will simply be brokers, people who find you loans, not the actual lender. Lender's do also have websites, so make sure you understand who you're dealing with and who actually takes on the loan. See Types of Lenders for more information.
- Compare sites and rates: Visit many sites, and compare and contrast not just the big numbers and major terms they'll throw at you, but also the payment terms and the finer print (the fine print, by the way, will make much more sense after embarking on adequate mortgage training online).
- Verify the lender: Verify the lender who will underwrite and finance the mortgage at the FDIC's website.
- Choose brokers licensed in your state: Make sure the lender is licensed in your state before doing business with them.
- Get it in writing: Until you have an offer in writing confirming a certain a rate then nothing has been promised to you, and terms can change quickly.
- Don't get sucked in: Online access to brokers and lenders has made the process easier, but don't let it fool you. Sometimes what appears to offer mortgage training is just an advertisement. Be smart, and be safe before sharing your personal and financial information online.
No-Loan Mortgage Sites
Many mortgage websites aren't brokers or lenders, they simply provide you with a lot of mortgage information, news and rate comparisons. These sites also offer a lot of educational information to help you understand the process and often include mortgage calculators. They are a great place to start because they can help you wrap your head around how the mortgage process works and what kind of financial terms to expect.
Beware however that many of these sites are really "referral" sites that give you general information and then provide links to the actual lenders and brokers. This does not make their information less valuable, but take their recommendations with a grain of salt. Also beware that the amounts they quote when they refer you may not be the real rate you'll actually receive since most advertised rates are a best case scenario.
Government and Trade Sites
In addition to no-loan sites that provide information, don't forget to visit the many government, non-profit, and trade websites available. This includes sites such as the Department of Housing and Urban Development; Fannie Mae; Freddie Mac; and the Mortgage Bankers Association of America. Use these sites to compare the information you receive on no-loan sites, since generally the government websites are less biased in their mortgage training advice since they're not necessarily trying to sell you a product (but be aware that Fannie and Freddie are businesses that are quasi-governmental in nature).
Mortgage Loan Sites
There are generally three different types of mortgage sites that not only provide information, but also serve as the broker or lender.
- Auction sites: these websites have you fill out an application, which the site then sends to multiple lenders. The idea is to make lenders compete over your application. Be aware that most auction sites won't send to every possible lender, but only a few selected partners, and there is often a financial arrangement between the auction site and the lender. Still, this can be a good way to get multiple quotes to compare.
- Single lender sites: many lenders have their own website where you can fill out an application and receive a quote. If you've used an auction site, and chosen a specific vendor, you may want to deal with that vendor directly rather than through the auction website.
- Multiple lender sites: these sites work slightly differently than auction sites. You do not fill out an application, but rather you enter in information about your property, the loan amount, etc, and they give you the current rates, APR, points and other valuable information. Then, after you've compared different types of loans, you can go through the application process to receive an actual offer. Be aware at this point, your application will be moved to a specific lender and won't be through the original website. Some lenders are less interested in applicants who come in through this process, since it usually means less money for them than if the applicant had gone directly through them, so always consider applying through the lender's own website.
While mortgage training has certainly gotten easier online, there is more information than ever which can be confusing and is often downright misleading. Practice good judgment and common sense when comparing mortgages and mortgage rates. Read the fine print, and make sure you are completely comfortable with the process before taking the plunge.
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