•  A smart pig on a stack of books
  • Consumers are turning to online mortgages

    Lady sitting on couch with laptop

    In the digital age, most Americans realize there are deals to be had if they scour the Web looking for products or services. Major online retailers might offer less expensive options than a local store or online coupons might make a purchase more affordable for a customer.

    But Web deals aren't limited to retail purchases.

    "There should be a great opportunity for online shopping" when it comes to prospective homeowners looking for mortgage loans, according to Mark Schwanhausser, a senior analyst at Javelin Strategy and Research.

    Schwanhausser said the Internet offers consumers the means to shop and compare different mortgage plans from the comfort of their homes. In fact, Reuters reported buying a computer or a pair of shoes from the Web isn't much different than shopping for a mortgage.

    Checks and balances
    Americans looking to buy a new home or refinance their existing mortgage can find online mortgage shopping advantageous, according to Reuters.

    Schwanhausser believes this new way in which people are looking to secure mortgage loans puts additional pressure on financial institutions. With social media and other forums on the Web, consumers are able to see every shortcoming a company has had through comments made by other customers.

    "If you build a track record of ineptitude, you're probably not going to succeed in the online marketplace," Schwanhausser said.

    Looking for online mortgage deals is gaining popularity
    The surge in online mortgage shopping isn't just limited to the U.S. Our neighbors to the north are also getting in on the trend. A poll from the Canadian Mortgage and Housing Corporation revealed 84 percent of first-time homebuyers went online to gather information about their mortgage options. Meanwhile, only 76 percent of repeat mortgage consumers went online to check their options.

    The survey also revealed 40 percent of first-time buyers use social media as a guide when starting online research for mortgages, which is nearly twice as many repeat mortgage consumers.

    While first-time buyers are often younger and more tech savvy, it seems more people than ever before are rating their broker or lender using social media.

    Lenders are starting to support the communication between consumers, Erin Lantz, director of the newer Zillow Mortgage Marketplace, told Reuters.

    "Not only can consumers see service-level information - but companies can see that, too," Lantz said. "It's hard to compete when your service levels don't compare to your rates and fees."

    The survey found 20 percent of respondents rated their broker or lender, while 30 percent used social networks to help them find referrals for mortgage professionals.

    Don't be afraid to shop around for the best deals
    While online shopping is giving mortgage loan consumers another way to secure financing, Fox News recommends potential homebuyers to examine all of their loan channels, whether it be online, by phone or in person.

    In some cases, real estate agencies will have advocated a certain bank or financial institution that is affiliated with their agency. However, Fox News said it isn't necessarily a smart idea to make a loan selection based on one agency's recommendation.

    In order to find the best rate, it's vital to provide the same information to all lenders. The person seeking financing can then comb through the rates to find which deals stand out.

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