Three Ways Homebuyers Can Use Tech to Save on a Mortgage

by Susan Paige on November 16, 2018 · 0 comments

Buying a home is a goal that people all around the world strive to accomplish. It’s a milestone that signifies that someone has worked hard, saved, and been smart with their money. It’s also one of the biggest financial decisions most people will make in their lifetime. Part of that decision involves choosing a mortgage, and that’s something that can carry consequences for years into the future.

Mortgages, in general, are poorly understood financial instruments. They’re complex, paperwork-heavy, and not very user-friendly. In truth, the banks have plenty of incentives to keep it that way. After all, it’s in their best interests to squeeze as much profit out of every mortgage as possible. For the homeowner, choosing the wrong mortgage can cost them a bundle over the life of the loan, so it’s important to choose wisely. The good news is that homebuyers now have a powerful ally in their quest for the best mortgage deal: technology. Here are three ways homebuyers can use technology to save on a mortgage.

Use Online Resources to Bolster Your Finances

Sometimes, saving money on a mortgage has everything to do with how the borrower prepared their finances prior to taking it out. The first step is for the borrower to find out their FICO score well in advance of looking for a mortgage. That will allow them time to request any corrections to things that appear in error in their credit history, as well as to take steps to improve their financial standing. Fortunately, there are plenty of high-tech tools that can help almost anyone get their financial house in order before seeking a mortgage. It’s a good idea for homebuyers to turn to apps like Mint to manage their day-to-day finances, and automated savings apps like Acorns to help pad their down-payment funds, so they’ll be in good shape to get the best possible mortgage rate when the time comes.

Have Lenders Come to You

For years, mortgage companies and lenders have had a distinct advantage over borrowers in that it was near-impossible for borrowers to conduct an apples-to-apples comparison of mortgage offers. In general, the process of securing a mortgage meant checking with a few banks or credit unions in search of the best deal, then moving forward with the one that seemed most likely to say yes. In such a scenario, the banks had all the power, as they knew that potential customers had little choice but to come knocking. Now, technology has flipped the script. Today’s homebuyers now have the advantage in the form of new tools that let them search far and wide for a mortgage. They can turn to AI mortgage brokers to check the best mortgage rates on offer, which forces the lenders to compete for business and cut their costs to attract borrowers.

Turn to a Fintech Lender

Technology doesn’t only help homebuyers to find the right mortgage, it’s also becoming the backbone of a whole new breed of lenders. They’re called fintech lenders, and they’re springing up all over the world to challenge traditional banks for the lead in the mortgage industry. Fintech lenders tend to use digital processes that allow them to lower overhead, reduce processing time, and eliminate complexities. For borrowers, that means lower costs, better rates, and faster turnaround times when securing their mortgage. That’s why homebuyers should consider lenders like Quicken Loans’ Rocket Mortgage or fintech upstarts like Lenda when shopping for a mortgage. More often than not, they’ll offer a better deal than traditional lenders, and complete the mortgage process far faster. How fast, you ask? Rocket Mortgage can deliver a mortgage approval in as little as 8 minutes, which is less time than you might spend on hold with a traditional lender.

Keep Your Eyes Peeled

Any way you look at it, technology can save homebuyers a tidy sum on their mortgage. From preparing to borrow to lowering rates and costs, there’s no facet of the process that can’t benefit from it. The advantages don’t end when the mortgage is secured, though. Using the same tech tools, homeowners can stay on a constant lookout for refinancing options that could save them even more money on their mortgage throughout the life of the loan – and that’s just accounting for the technology of today. In all likelihood, technology is going to continue to shift the balance of power in the mortgage industry away from lenders and towards borrowers, so the savings will keep on coming well into the future.

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