Look at this BS.
Many Finding Mortgages Online
NEW YORK, Apr 16, 1999 (AP Online via COMTEX) -- When Sky Tsan
refinanced his home mortgage this past winter, he searched the Internet
for the best rates, downloaded a loan application, filled it out on his
personal computer and e-mailed it -- all in just a few minutes.
What a contrast from 10 years ago, when the 46-year-old engineer and
his wife, Sue, first applied for a loan on their three-bedroom
Freemont, Calif., ranch:
They spent days calling around and searching local newspapers for the
best rates and terms, made an appointment with a banker just for an
application, took the paperwork home, met again with the banker, then
waited for the application to be retyped before signing it and setting
the long approval procedure in motion.
Tsan (pronounced Tan) figures he shortened the process in getting his
new 6.625 percent 15-year loan by a few weeks this time around.
''It was quick and easy ... and went so smooth,'' he said. ''I wouldn't
do it any other way.''
First it was books and clothing, then stocks and automobiles -- as more
households become comfortable doing business on the Internet, some are
now making their single-greatest financial commitment online as well.
And more and more, financial institutions, large and small, are
scrambling to put mortgage application services online so they won't be
left out of what some predict will be a market bonanza.
Forrester Research Inc., of Cambridge, Mass., estimates online
mortgages will capture nearly 10 percent of the $1.3 trillion mortgage
market by the year 2003.
The benefits of searching for a mortgage online are obvious: Besides
the convenience of shopping 24 hours a day from the comfort of home, it
saves time and energy.
But will it save money? Sometimes, but not always, industry experts
warn.
''It's easy to get wrapped up in all the bells and whistles -- like the
fancy calculators. But there are still many deals in the local
marketplace that will beat any deal you may get at the Net,'' said
Keith Gumbinger, vice president of HSH Associates, a Butler, N.J.,
mortgage research firm, which also publishes data online (www.hsh.com).
And, he said, it's sometimes difficult to tell much about an online
lender. It may have a fancy Web site but turn out to be a one-person
operation in the middle of nowhere. He suggests borrowers exercise some
caution before divulging personal financial information, or at least
try to learn something abut the lender and how their privacy will be
protected.
''You should think of the Net as a tool, a very powerful tool, that
will help you find out what's available (in mortgage information), but
it's not an end all,'' Gumbinger said.
Peter G. Miller, author of several home buying books and operator of a
a consumer information Web site (www.ourbroker.com), agreed that one of
the greatest advantages of the Internet is that it provides PC users
with quick access to reams of data that would have taken days, or
weeks, to amass off-line. But it's only one of many mediums, he said.
''Radio didn't replace newspaper and television didn't replace radio.
The Internet isn't going to replace other media,'' he said. ''I think
the myth of the Internet is that it's always better, and I don't think
that's necessarily true.''
Many lenders, however, maintain they do provide significant savings for
online customers. In fact, they say, the wide availability of
information over the Internet has helped keep rates and fees
competitive.
Countrywide Home Loans of Calabasas, Calif., the nation's largest
independent mortgage lender (www.countrywide.com), says qualified
online borrowers can get up to a 1 1/4 point discount in closing costs.
(A point is 1 percent of the total loan value.)
Finet Holdings Corp., of Walnut Creek, Calif., (www.finet.com) which
operates iQualify and Interloan, charges online customers on average
half a point in commission fees vs. 1.25 percent off-line.
Dan Rawitch, Finet president, says customers can do part of their
transaction online -- perhaps prequalifying -- and the rest off.
''Some people want a complete online experience, some want their hand
held, some like a little bit of both,'' he said.
Tsan -- who has refinanced twice in a year, the last time with Finet --
says he's done it all three ways and prefers working mainly online.
But the way things are set up right now, he and other online customers
still need to have some contact with humans -- a notary brings papers
to sign and loan officers bring electronic scanners to transmit
important documents from your home. And most closings are face to face,
although some can be conducted via teleconferencing.
''It's an exciting technology, and we've only just started,'' said
Harold Otto, who maintains the Web site for New York Mortgage Exchange,
of Yonkers, N.Y., (http://sal.net/mortgage) which began accepting
online applications over a year ago, and now conducts 35 percent of its
business electronically.
''Wait 'til next year,'' he said.
Copyright 1999 Associated Press, All rights reserved.
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By VIVIAN MARINO
News provided by COMTEX.
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