How To Get a Mortgage Loan Online

Many homebuyers apply online for a mortgage because it is convenient. Some even go so far as to complete the transaction without meeting anyone in person. It might seem weird to you because it is a significant undertaking, but it is not unusual.

Most lenders provide a way for you to get preapproved online. The online lending process is now more efficient and accessible than ever. Here are the steps to apply for a mortgage loan online.

Getting a Mortgage Online

Applying for a mortgage online is similar to traditional loans. The critical difference is that you do it online, not in person or over the phone. Different lenders will have varying processes, but below is a general outline of how it will go down.

Comparison shop

The first thing is to get your financial information together. These include pay stubs, bank statements, and tax returns. Next, find mortgage lenders who process applications online and narrow your list to three or four.

Many will let you get a mortgage rate quote online before you apply. However, know that your credit score can take a hit if it gets too many inquiries and that rates change daily. Aim to do this relatively quickly—ideally on the same day for the most accurate comparison.

Get estimates

Once you submit your application and get preapproved, you’ll receive loan estimates from the lender. The basis is the information you provided on your application. The loan estimate provides you with what you need to know about the costs of each offer so you can choose the right one for you.

Still, the offer is not the final offer. You must submit documents and lock in your rate for that to happen.

Make your choice

Compare your options based on the offer. Consider origination fees and how much these expenses could add to your closing costs. Additionally, look for items in the proposal that might seem suspect, such as miscellaneous fees. Find out what they are before committing.

Submit your documents

After settling on a lender, the underwriting process is the next step. Typically, the lender will ask you to upload the documents they need to process the loan via a secure portal. Try to fulfill these requirements as soon as possible to avoid delays. Suppose the lender sends you documents for an electronic signature. Send them back promptly, but only after reading and understanding them thoroughly.

Close the deal

After meeting all the requirements, the lender will send your closing disclosure, which you should review and sign. The disclosure should reflect your loan estimate regarding the loan terms, including the interest rate, costs, and loan amount. 

Suppose you notice some significant differences in the closing disclosure and loan estimate. In that case, ask for clarification. If you’re unhappy with the explanation, you can refuse to sign it. In most cases, you have three business days to decide.

You might also need to meet with your lenders in person at this final stage. The lender should make that requirement clear to you at the very beginning.

Online Applications Are an Option

Applying for a mortgage is easy. Most lenders have a website where you can click a button to start the process. However, that doesn’t mean you should do so haphazardly. Consider your needs as a borrower to determine which lenders check all your boxes. Compare rates, fee structures, and reviews to understand where to find the best deal and service.