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Pros and Cons of Online Mortgage Lenders

Pros and Cons of Online Mortgage Lenders

You can’t beat the ease of applying for a mortgage online, rather than going to a bank in person. But is it the best decision for you? Here are the pros and cons of online mortgage lenders that you should consider when you’re buying a home.

Pro: It takes less time

If you’re busy or need to move quickly, then applying for a mortgage online may be a great choice for you. You won’t have to travel to the bank, find all your documents, and copy and fax all those documents. Instead, you’ll simply upload everything you need right on the website. The time saved can be significant.

Con: It’s easier to make mistakes

While filling out forms online can be a great time-saver, it can also lead to more errors. You could misunderstand a question and provide the wrong information. It’s also more difficult to get answers to any questions you may have while you’re filling out the forms. You may have limited access to customer service, which is generally only available during business hours.

Pro: It’s easy to shop around

Because it’s so easy to access information from online lenders, shopping around is a breeze. Shopping for a mortgage is just like shopping for anything – you should do your research to make sure you’re getting the best deal. Each lender will have its own rates and terms, and when you shop around online, you can easily compare them.

Con: There are more scams

Scams are prevalent all over the Internet, and it’s no different with online mortgage lenders. When you’re shopping around, you may come across a deal or two that seem too good to be true. That’s a red flag. Mortgage scammers will entice you with low rates or insist on some kind of fee or prepayment. If you have any doubt in your mind, do some research on the company to make sure they are legitimate, or it could cost you.

Pro: You’ll likely find lower rates and fees

In general, it’s not unusual for online mortgage lenders to offer lower rates and fees. After all, they don’t have the same kinds of operational costs that brick-and-mortar banks have. They can then pass those savings on to consumers. Even a slight reduction in your rate could save you serious cash over the long haul, which makes online lenders very attractive to many buyers.

Con: You many not qualify for those low rates after all

Online mortgage lenders attract new customers with promises of low rates, fees, and closing costs. But it’s important to read all the fine print. While they originally promise you a low rate, after you’ve filled out all your forms it may turn out that you don’t qualify. This could waste weeks of time and cause serious frustration. And you may be at the point where there’s no turning back if you want to close on the house, so you end up paying more.

In the end, online mortgage lenders can be a great choice for many homebuyers. By understanding both the advantages and disadvantages of securing a loan online, you can be more confident in your ultimate decision.

Compliments of Virtual Results

How to Make an Offer

How to Make an Offer

After weeks or months of searching, you’ve finally found the house you love. While it’s an exciting time, it can also be stressful because suddenly the home buying process gets serious. It’s important to be prepared if you want your offer to be accepted. Here’s what you need to know when you’re getting ready to make an offer on a house.

Get pre-approved for a mortgage

If you’re serious about buying a home, you need to get pre-approved for a mortgage before submitting an offer. This is especially true in a competitive market where the seller may get many offers. Getting pre-approved shows the seller that you’re not just window-shopping – you are seriously in the market for a home.

Determine your price

It isn’t always necessary to offer the listing price of the home. There are several factors that will weigh in on your decision. Find out what the comps are for the area, and seek advice from your real estate agent. It’s possible to get discounts on the selling price if you’re paying with all cash, if you limit your contingencies, or if the home has been on the market for a period of time. However, if the market is hot, you’ll want to make an offer for the full amount and do it as quickly as possible.

Prepare the paperwork

Once you’ve gotten your pre-approval and determined your price, your real estate agent will help you prepare a written offer. This purchase agreement will become a sales contract if the offer is accepted. It should include:

  • Description and address of the property
  • Price being offered for the home
  • Terms of the deal, for example whether or not you’re offering cash or obtaining a mortgage
  • The amount of the down payment
  • Details of the escrow
  • Target closing date
  • Contingencies such as financing and home inspection
  • Date of possession
  • Other requirements determined by the state, such as seller disclosures and attorney review
  • Expiration date of the offer

Submit earnest money

In addition to the purchase agreement, you will submit earnest money when you make the offer. This is a cash deposit that is a sign of good faith. If your offer is accepted, the earnest money will be placed in escrow and used towards your down payment. This money is forfeited if you decide to back out of the agreement at a later date.

What happens next

Once the document is complete, your agent will submit the offer to the seller or the seller’s agent. The seller will have one of three responses: they’ll accept it, reject it, or make a counteroffer. If a counteroffer is made, the seller will make suggestions about changes to the offer such as a modified sales price, date of possession, or removal of contingencies. Once you’ve received the counteroffer, you can accept it, reject it, or make a counteroffer of your own. This continues until either the buyer and seller agree on the terms of the sale or the offer is refused. Once the offer is accepted and both parties sign, it becomes a legal contract.

Compliments of Virtual Results

Selling With Tenants

Selling With Tenants

Is it time to sell your rental property, but you’re not sure how to deal with the current tenants? If you’re a landlord, selling a home that is currently occupied is not as straightforward as a traditional sale. It’s important to know what a tenant’s rights are, and how best to handle the transition. Here’s a rundown of what you need to consider.

The type of lease your tenant signed

If your tenant is on a month-to-month lease, check state law to determine how much notice you need to give them to vacate. Typically it is 30 to 60 days. Next, send a letter to your tenant advising them of your intent to sell and the date their lease will end.

Conversely, if your tenant signed a fixed-term lease, you are obligated to let them live out the term of the lease. The lease can only be terminated early if it is stipulated in writing, or if the tenant has violated any terms of the lease.

Showing the property

If you have a difficult tenant, it may not be in your best interest to show the property while it is still occupied. An unhappy tenant likely won’t do you any favors, least of all getting the home clean and ready for a showing. If your home doesn’t look its best to potential buyers, it could impact the number and quality of the offers you receive.

On the other hand, if you have an agreeable tenant, you may be able to work out a situation where you can show the property while it’s occupied. It’s easier for potential buyers to imagine themselves living in a home that is occupied, as opposed to one that is vacant. Be aware that you need to give proper notice to your tenant before you, an agent or potential buyers stop by. This is typically at least 24 hours.

Selling to an investor

If you’re interested in selling your property before your tenant vacates, you might consider selling to an investor. In most cases, investors will be thrilled to know that the unit is already rented. The new owner is obligated to honor the current tenant’s lease, so you won’t have to worry you’re kicking anyone to the curb.

Selling to the tenant

If your tenant is quite happy living in the home, it’s possible that they would be interested in buying it. This can be a win-win situation for everyone. But what happens if your tenant doesn’t qualify for a mortgage? In that instance, you could offer seller financing, where the new owner makes payments to you instead of the bank.

When all else fails

If you find yourself in a position where your hands are tied, you do have other options. First, you can offer a discount on rent to get your tenant to cooperate about showings. A little break on their monthly expenses might encourage them to be amenable to interruptions and to keep the home clean. Second, you can offer to pay your current tenant to leave by essentially buying them out of their lease. You can also offer to pay their moving costs and security deposit at their next place.

Compliments of Virtual Results