Online Mortgage Applications

Written by Beth Hrusch
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With the proliferation of online mortgage companies and brokers in recent years, applying for a mortgage has never been easier or less complicated. With an online application, lenders can get the information they need to start the loan process without even needing to meet with the borrower. In many instances, the borrower can even send one application to several different lenders and receive answers within hours.

Online Applications Make It Easy

The purpose of the application is, first, to help the lender determine what kind of loan is desired, and second, to find out the borrower's financial information. The lender will use standard debt-to-income formulas to make a judgement regarding the ability of the borrower to pay back the requested sum. A typical application will ask what type of loan is desired, the purpose of the loan and personal information including assets and liabilities.

Once the lender has this information, he will check the borrower's credit history with the credit reporting bureaus. A good credit score will tell the lender that the borrower is a good risk. This equates to a more attractive offer from the lender, namely in the form of a lower interest rate with lower fees and perhaps a willingness to negotiate the points. Bad credit means that the lender will have to decide what kind of loan amount he is willing to offer and at what terms.

It is advisable that anyone who wants to apply for a mortgage online first make sure that his or her credit history is accurate. Also, preparing for the questions ahead of time will make the process go more quickly. Knowledge of liabilities and the value of all assets is useful information to have on hand.

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