Borrowers are constantly being urged to apply for their home mortgages via the internet. More and more, borrowers have been disappointed with this method of acquiring a home loan. Too often, borrowers are surprised toward the end of the transaction to discover that their loan documents are significantly different than they thought they had been “promised” over the phone.
It is well known that the internet lenders are seeking the “best” quality borrowers . . . those with high credit scores, low qualifying ratios and plenty of “reserves” (money left after Close of Escrow). They have had little patience for the more marginal buyer.
Internet lenders, for a long time, complained that they were impeded by a prohibition against revealing credit scores to their borrowers. That changed a long time ago and has allowed mortgage lenders to counsel with would-be borrowers about how to improve their credit profile and scores. In other words, the internet lenders have been trying to “catch up” with what local lenders have been doing for their borrowers for several years.
Humboldt Home Loans has long been a leader in making sure borrowers understood the importance of credit scores. We make sure a borrower knows their individual credit scores as well as how the score was derived and what it means to their ability to acquire particular financing. Via this sort of frank discussion of credit issues, we are able to advise borrowers on steps to take to improve their credit scores. In many cases, we uncover erroneous information contained in a credit report and assist the borrower in correcting the data, thereby improving credit scores.
Many borrowers benefit from discussions regarding gift funds, whether it is wise to use retirement funds for down payment purposes or the rules about having a co-borrower. Local lenders consistently counsel not quite ready would-be home buyers about a “roadmap to home ownership” and plans to get ready to buy a home.
These are all efforts that internet lenders are generally unable or unwilling to do. Relying heavily upon on advertising to “bring in the business”, there is little or no mention of any assistance programs for those borrowers who require extra assistance in preparing to acquire a home loan.
It is unlikely that internet lenders will be able to counsel individual borrowers like local lenders routinely do. For instance, we review every line of the credit report, help make necessary calls to creditors, write appropriate explanations, draft letters to the various credit repositories regarding misinformation, etc. Internet lenders have neither the inclination or the methods in place to perform these important functions for their borrowers. Only local lenders can provide this “service” on an everyday basis.
There is no denying the anonymity and the ease of applying afforded by internet lending sources. But, one can’t beat the service and personal attention acquired via a local lender.