Online Home Mortgage Loan

Shopping around for a home loan online — home mortgage loan products are now part and parcel of the website offerings of virtually all major banks – requires heightened savvy on the part of the consumer. In days gone by, the neighborhood banker would act as part adviser and part salesman in the process of obtaining a home loan. Mortgage online opportunities — even though they are convenient and tout the consumer’s ability of applying in the middle of the night, after hours or on the weekends – lack this personal contact and source of information. The consumer who is unaware of the glossary used in the online agreements may soon find herself frustrated or at least confused.

For example, an adjustable rate mortgage, a.k.a. ARM, does not feature a fixed interest rate. There are numerous variations and products that fall into this category. The online home mortgage loan applicant must be careful to read through the fine print of the information to find out what the cap rate might be, how often and how much the rate increases and also which adjustment index the lender relies on when calculating the interest rate hikes. ARMs have gotten a bad reputation over recent years; they are blamed for the rapid decline of the American real estate market and increase in foreclosures.

An online home mortgage loan that offers a balloon payment option is a good choice for the would-be homeowner who needs initially low payments and anticipates a windfall of money in the near future. A balloon mortgage features low payments for five, seven or even 10 years. At that time, the balloon payment clause kicks in and the payer is required to remit the remainder of the balance due. In the alternative, the homeowner may choose to refinance the balance, if she meets the credit requirements of the lender at that time. Unless the home buyer has a reliable means of coming up with this sum of money at that time, applying for this home loan mortgage online is not generally advisable.

Of course, applying for a home loan mortgage online is not a process that is reserved only for future home buyers. Current homeowners in need of a refinance loan also look online. Home mortgage loan terminology in this instance varies slightly. For example, the consumer may read up about a ‘cash-out refinance loan’ product. This loan specifies that the homeowner intends to borrow more money than she currently owes on the home. As a loan product, this kind of refinance loan is an attractive option if the home’s value has increased and if the homeowner plans on improving the property – an decision that may heighten its value even further.

While reading up on the terms most commonly used when applying for a home loan mortgage online is a good idea, the consumer who is not completely certain about the scope of a loan product – or who may need further advice on the benefits or drawbacks of one loan over another – should rely on the in-person services of a neighborhood banker.