Ask the Expert: Apply for mortgage online?

Q – I am applying for a mortgage and my local lender told me to fill out the application online. Should I feel insulted?
A –  Absolutely not! The Internet has changed many things about how people shop and apply for mortgages. One of the key changes is online applications.

Online applications can save time. You won’t have to drive to an office, and you can gather your documents at home. The whole transaction will sometimes be handled online. The lender might ask you to submit online or email documents such as check stubs, bank statements, and tax returns.

In some situations, you’ll still have to meet with a loan officer to close.

Q – If that is the case, maybe I should just fill out a bunch of applications online? I can see which one has the best deal that way.
A – Lenders like to have leads on loans, of course, but making a dozen applications isn’t usually necessary.

Many applications won’t change whether you are a good risk or miraculously lower an interest rate. People with great credit can choose from two or three advertised offers that have the right combination of interest rates and fees. For people with bad credit or debt and low down payments, reviewing online offers before applying can help find a lender that works with credit problems.

On the other hand, multiple applications can let you compare rates and fees and that can help you make the best deal. Just be sure to compare apples to apples. If you apply for a 15-year, fixed-rate mortgage with one lender, be sure to make the same application with another so you can make a good comparison.

If a mortgage application is approved, the next step is the mortgage application fee. These fees are expensive and, at that point, you want to decide on a lender.

One consideration about online forms: Be sure to be as accurate and thorough as possible. It is just like sitting with a loan officer.