Should you refinance your mortgage online?
Julie Garton-Good, GRI, DREI

You can do most anything using technology. Shop for a car, a house, even take classes online. But how about refinancing your current home loan using Internet resources? Is it something you'd be interested in and comfortable doing?

I can say that I found refinancing my home with the aid of the World Wide Web to be a most satisfying experience. I became interested after finding a plethora of lenders with attractive refinancing rates. I was amazed at how many lenders were national in scope, without state-limited boundaries for their products. (This is due, at least in part, to nationwide lending/banking changes in the past several years.)

I took my time reading the consumer information articles, programs and corresponding rates provided at many sites. But my interest peaked when I came across a mortgage broker who asked to "let us shop for the best rates and points to suit your needs." Needless to say, I completed the information requested and e-mailed it to them--income, debts, assets and other information cursory to most loan applications. I had the option to receive the information either by e-mail or by fax; but since I was planning to stay online, I chose e-mail.

Within approximately 10 minutes, I received information on 10 different loans. Although the initial information was somewhat sketchy, I could click on icons to go deeper for "the rest of the story" on each loan (an option that I exercised on several of the loans).

After sorting out the information, I settled on the two loans that seemed best. A final screen informed me that I would receive, via either e-mail or fax, a complete breakdown of the costs involved and further application instructions. I posted my fax number in the box provided and clicked on "fax it to me."

Then it hit me. I was well into the early stages of refinancing my home and hadn't even talked to, let alone met, a real person. And I had shared, somewhat openly and across the Internet, personal information about myself, which although somewhat sketchy, provided bits and pieces about my financial status. Where was that information now? Who was using it?

My story turned out fine--to the best of my knowledge. The company was legitimate (I spent time off-line checking them out), the loan closed in less than two weeks, and the paperwork (including verification of funds and filed tax returns) was done via fax. The lender was located in a state 2,000 miles away; but I trekked down the block to my local title company to close the loan--all without meeting the lender face-to-face.

Now for the questions and concerns. Yes, someone sinister might have appropriated my personal information via the Internet. But the same thing could happen even when dealing in person with someone who happens to lack integrity.

Yes, my financial information might have been "sold" to someone else who could use it. Think about it, however, and you'll realize that the same can be said of the majority of credit information anyway.

And I suppose that it could be said that I might have been wise to check out the company before submitting my financial information to them. (This omission, in my estimation, poses the greatest potential negative impact when dealing with online applications.) I think I waited to check out the company until I was offline, because I felt that until I truly committed to take a loan from a certain lender, my risk was more than compensated for by the reward of saving time and effort using this medium. But if I were to do it again, I would check out the lender's credentials first, before submitting my personal information.

The benefits of online refinancing were great. I loved shopping for rates and fees in the comfort of my home office. I loved controlling the application step-by-step. If I didn't want to move on, I could just "escape" and turn off my computer. And I loved the wealth of information available to me. While I spent less than one hour searching through information, I could quite easily have spent days.

It's clear that technology is streamlining the way we apply for mortgage loans. But perhaps the greatest roadblock is the speed of our acceptance (or lack thereof) of this way of doing business. Just as we no longer have to visit an actual bank building to withdraw funds from our checking accounts, online mortgaging is the next level of accessibility and comfort for financing America's homes.