Online Mortgage Difficulties
There are many websites out there that allow you to
complete your mortgage transaction online, and the number
is growing everyday. However, in many respects, it is
still much easier to window-shop for a mortgage online
than it is for consumers to actually complete their
online mortgage transaction. In this article, we will
examine a variety of reasons that purchasing a mortgage
online is still more difficult.
One reason for consumers’ reluctance to complete
mortgage transactions online is the confusing number
and variety of mortgage sites. While having lots of
choices is generally good for competition, and for the
customer, consumers can feel overwhelmed by sheer numbers
in an online setting. This is why online mortgage websites
may want to advertise on television and/or in print
media, establishing a familiarity with consumers outside
the online world.
This factor can combine with another factor that affects
many consumers – simple technophobia. Many consumers
simply do not trust the Internet enough to rely on it
for a complicated and important transaction like obtaining
a mortgage. Some consumer fears in this area have no
basis in fact, and are merely a reflection of an irrational
fear or misunderstanding of technology.
Other concerns, like the fear that information sent
over the internet may not be completely secure, can
be very legitimate. This is why online lenders usually
use encryption on their information exchanges, to make
sure the private and valuable information consumers
send them in applications is not misappropriated by
those who would use it for criminal purposes.
Another factor is that some mortgages simply aren’t
well-suited for online underwriting. Refinances and
equity mortgages for borrowers with good credit are
easy, assembly-line type loans that are perfect for
the online setting. However, home purchase mortgages
are much more complicated, featuring a long escrow process.
If something goes wrong with this process, many prefer
a loan officer who can sit down and explain what happened
and how to move forward, as opposed to a computer screen.
This is especially true for first-time home buyers who
may be generally unfamiliar with the process and require
lots of reassurance.