Online transactions used to be the territory of products geared for easy sale wherein consumers click their way through the latest movie or music, with the deal sealed once payment has been made and download completed.
But the wide reach of internet has opened up a new front for lenders to offer their products for prospective home-buyers seeking the best deal available, right at the tip of their fingertips. Online lenders are trying lure away consumers with rates that can match or even beat their traditional rivals, with offerings that range from 3.625 percent to 4.23 percent on the 30-year fixed loan, according to LendingTree.
Sites like LendingTree serves as the meeting point for lenders and borrowers to meet and according to its chief executive, Doug Lebda, his company processes some one percent of all home loan transactions in America. That was a defining testament of the strides that online mortgage businesses have achieved so far, which Lebda said practically started out so shaky very few lenders were then brave enough to be part of the system.
And that wave is not even a fad as the function of social media fortified the presence of online mortgage providers, with vigilance from satisfied borrowers providing the lead for house hunters trying their luck on web.
Most of their time, good reviews found on many lending sites produce happy consumers and Zillow Mortgage Marketplace director Erin Lantz credited the so-called community responsibility fostered among borrowers who made it a point to post their own good experiences and recommendations.
Such behavior eventually spurred a surge on online mortgage activities, Lantz said, who added that last year alone Zillow witnessed some 10,000 comments posted on its site and a 174 percent rise in mortgage requests.
With the market pretty much limited, considering the overall state of the U.S. economy, online lenders are hard-pressed to make a good impression.
“If you build a track record of ineptitude, you’re probably not going to succeed in the online marketplace,” Javelin Strategy and Research Mark Schwanhausser told Reuters.
That’s exactly what LendingTree is all about, which has been in the business for 15 years.
Its solid reputation made it so robust that the downtrend seen last year in mortgage lending failed to dampen the optimism of the company, Lebda said. That condition is actually the prevailing trend for all online mortgage players, he added.
According to Lebda, maintaining a good name and delivering services that only require so much effort from clients by the time the deal needs to be closed is the main attraction of the business.