.COMmentary: Home owners keep net busy

.COMmentary: Home owners keep net busy

By Mike Lotz

Home owners keep net busy

By Mike Lotz

A growing number of homeowners are going online to refinance their homes. Lower interest rates have spurred a boom in the refinancing market across the board. But online sites are getting a particularly heavy load of traffic from people doing everything from researching rates to filling out forms.

When rates drop, homeowners who choose to refinance typically do so to get a lower interest rate on their mortgage of hopes in saving money and lowering their monthly payments.

Although online companies just get 2 to 3 percent of the overall home loan market, that number can add up — especially because home loans are expected to be a $2 trillion market this year, according to the Mortgage Bankers Associations of America. Refinancing is expected to account for more than $1 trillion of those loans.

Online lenders such as E-Loan, Priceline Mortgage and NetBank say they have seen a big upswing in refinancing loans in recent months. NetBank had three times the volume of refinancing loans compared with what it has last year. E-Loan posted its first-ever profit in the third quarter, in part based on the booming refinancing business.

The upside for online customers is the convenience of starting the process from their desktops, instead of making an appointment with a lender. They can also research rates and fees, use online refinancing calculators, and compare multiple offers from different lenders at sites such as LendingTree.

E-Loan, for example, says it can approve an application in just two minutes, and customers can lock in their rates online.

The downside for online customers is that most of the paperwork has to be signed in person. Customers also have to get their home appraised, another offline process.

Despite allowing customers to file applications online, lenders often have to refer customers to telephone call centers for questions or to complete the application process.

The Internet, while not a complete solution for the homeowner, makes the lender be competitive on interest rates and fees associated with refinancing.

Researching, comparing multiple offers from different lenders, and starting the paperwork all in the comfort of your home, is a great start for mortgage companies who are online. With last year’s digital signature bill that recognizes the legality of online signatures, it won’t be long before the whole process can be completed online.

If you have any questions or comments, please email to questions@iwebwerks.com

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