In this busy modern world, free time is a precious commodity. The ability to complete the mortgage application process online is an attractive offer to many. To others, perhaps those with a little more time to spare, meeting with a broker or lender face-to-face is the only way. If you’re not so sure which type is best for you, read on…
Is it better to apply for a mortgage online or in person? If you feel like you need face-to-face interaction, then in person is probably the best choice. If however you’re comfortable with technology and don’t mind filling forms in online, then apply for your mortgage online as you aren’t limited to using a local broker or lender and you can free up precious time.
In-Person Mortgage Application
As long as there have been mortgages, there has been lenders who will meet customers to introduce mortgage offers and assist with the application process.
Many people prefer applying for mortgages in-person as, let’s be honest, you just can’t beat face-to-face conversation. You can exchange information and ask questions in real time, hand over and sign documents there and then. Things that can be done instantly and effortlessly in person can take hours or even days online.
Perhaps one of the main disadvantages of in-person mortgage applications is the fact that you have to schedule a time to meet, and then when the time comes around, you have to physically travel to the location, park your car and sit in an office for an hour or two. It’s quite typical to use up an entire afternoon visiting a mortgage broker, which is quite inefficient.
In today’s fast paced world, half a day is a long time. It’s enough to fire out a handful of emails, make a few calls and make some serious headway into writing that proposal you told your boss you’d have ready by the end of the week. Giving up that time for a single transaction is far from ideal.
Another disadvantage of in-person meetings is that you are limited to a set radius from your home or place of work. For most people this is around 15-20 miles or so. This effectively rules out using brokers from across the country. Not too much of an issue since a broker can still recommend products from any lenders from across the UK.
Online Mortgage Application
With the dawn of the internet, we live in a much more connected world. We are no longer restricted to communicating by letter or phone call. We now have the option to apply for mortgage deals from the comfort of our living room, with a laptop computer.
To the new generation, technology seems to come naturally. The days of flicking through pages of a newspaper are all but gone, the younger generation’s first method of approaching businesses is generally through a web browser. There aren’t many businesses left who don’t have some sort of a web presence. Not least banks and building societies who are closing branches left, right and centre.
It should come as no surprise then that the percentage of mortgage applications done purely online is increasing rapidly. The advantages of convenience and speed outweigh the benefits of speaking in person, it would seem. To add to that, you are no longer restricted to office hours. It doesn’t matter if you want to apply for a mortgage during breakfast at 8am or last thing at night before you go to bed. The internet never sleeps.
As well as speed and convenience, another benefit of online-only mortgage offers is that you are no longer restricted to the area around your home or workplace. If you can find it with a search engine, you can generally research and apply for it there and then.
There is no right answer
As with many things in life, there are pro’s and con’s of each options, so don’t restrict yourself to one or the other. Why not try both? Whatever works for you and gets the job done. You may try to apply for a mortgage online, only to get stuck on a particular part of the online form, and have to stop try something else. That’s fine, it hasn’t cost you anything apart from some of your free time.
Similarly, you may meet up with a mortgage broker, only to become slightly frustrated with their lack of motivation and people skills. There’s no reason why you can’t politely inform them that you have changed your mind and would like to leave it for another day.
Ultimately, it’s about finding out what works for you and your own particular lifestyle and needs. What matters is that you move forward in the most effective way possible and score a great mortgage deal at the end of it.
How can I apply for a mortgage?
If you haven’t applied for a mortgage before, then the first step will be to make sure that you have a good credit score. You can do this by following some simple principles:
- Always, always make payments on time for utilities and any loans/credit cards you may have
- Don’t have a credit card? Get one. Just make sure you pay it off in full each month. Or don’t use it at all.
- Make sure your partner or any other adults at your home have good credit scores
- Use a credit score monitoring service to identify any issues early on, such as Clear Score
- Pay off any debts as much as possible. Lender’s don’t want to find out that you owe a load of money on credit cards and loans.
Once you’re happy that you have a good credit rating, the next step is to sit down and run the numbers. Work out how much you are able to afford each month for mortgage repayments. Consider what term you’d like the mortgage over, how much you can afford for any fees that arise, etc.
Collect your pay slips. Lenders can want as much as three years of pay slips, although 1-2 years is more typical.
Another important task is to save for your deposit. You’re going to need around 10-15% of the value of the house you’re looking to buy. This can take years of saving, so the sooner you start the better. Ideally you’ll already have some savings to speed things up.
Next you’ll want to start your search for suitable mortgage deals. We’d recommend finding a trusted independent mortgage broker to help with this. Ask friends, family and colleagues if the have had a good experience with a broker that they would recommend
Are there online-only mortgage deals?
Yes, there are deals available online-only, which often have some of the best rates available. Therefore it’s worth considering searching online for these offers, even if you’re mainly visiting banks and building societies in person.
If you are using a mortgage broker, have a chat with them about online-only offers and ask them if there are any particular offers that they recommend.
Are there online-only lenders?
A new breed of lender has started popping up in recent years as the internet becomes the first choice for many people’s buying activities. Online-only lenders promise to provide some of the best rate mortgage deals, due to their efficient, branch-less business structure.
The UK’s first online-only mortgage lender is Trussle. They launched in December of 2015 and have done very well for themselves. Since they launched, new rivals have started to pop up, including companies such as Burrow and MortgageGym.
This new market is great news for consumers, who now have more choice when it comes to finding the perfect mortgage deal.