Should I Use a Mortgage Broker to Refinance or Online Lenders?
- The Department of Housing and Urban Development (HUD) and the Real Estate Settlement and Procedures Act (RESPA) encourage mortgage applicants to shop, compare and negotiate the terms of their loan. Mortgage brokers generally shop several lenders for your refinance, which can mean a wider selection of loan products and terms to choose from.
- Brokers vary in their quality of service, ethics and level of expertise, and because they are not direct lenders, they are less accountable for whether you repay the loan. Online lenders loan money directly; therefore, they check that you can afford the new loan--which is good for you. Online lenders are knowledgeable about all their refinance programs because they come directly from their line of products.
- If you feel more comfortable doing business face-to-face, go with a mortgage broker who will give you personalized, one-on-one service. You know where she works, can go to her office and contact her directly with specific questions. With an online lender, you must submit items via Internet, fax or mail and don't get that personal interaction with your loan representative, as most of the loan information is available online. RESPA law govern both online lenders and brick-and-mortar loan brokers, so both services must disclose and provide due diligence during the refinance process.
