Tips for Comparing Online Mortgage Lenders

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Comparing online lenders is not much different than comparing brick-and-mortar banks or credit unions. Mortgage borrowers should choose a mortgage lender by examining features that are important to them and then conducting a side-by-side analysis.

For most borrowers, mortgage rates, fees, loan types and credit score requirements are the most important features to consider. You can start by researching online and reading reviews; however many lenders don’t disclose fees or even interest rates on their websites, so you may have to complete an application or call them to get a rate quote.

Other items you might be able to find on a lender’s website include mortgage discounts, borrower qualifications and any special features that set them apart (such as rate match guarantees or specialized technology that streamlines the application process).

Methodology

We reviewed 12 mortgage lenders that do business both online and in person throughout the United States. The lenders we reviewed represent some of the largest mortgage lenders by volume, which include banks, credit unions and online lenders.

Our scoring methodology included capturing 10 data points, which covered interest rates, lender fees, loan types, discounts, accessibility and borrower requirements.

The best lenders received a score of four stars or better and represented outstanding performance or services in one or more areas.

The following is the weighting assigned to each category:

  • Loan costs: 30%
  • Speed: 20%
  • Credit requirements: 20%
  • Loan types offered: 20%
  • Access and availability: 10%

Specific characteristics taken into consideration within each category include annual percentage rate (APR), average interest rate, origination fees, minimum credit score requirements, discounts and customer service availability.

We also offered bonus points up to 5% of the score when a lender considers alternative credit data.

source:ForbesAdvisor.com

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