Lender Selection - Help Pick your Poison
Written: Apr 12 '02
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Pros: Helps you narrow your choices to three lenders and $250 credit card rebate
Cons: There are broker fees and I am not sure how I was matched to Lender.
The Bottom Line: Not really sure what the benefit was of going through LendingTree. I wouldn't do it again but they didn't do anything wrong or deceitful in my case.
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| gerardoa's Full Review: LendingTree |
I got linked to this site from a Yahoo! Banner ad. As mentioned before, the premise behind this website is that your business is given to three lenders who offer you their best rate and compete for your business against each other and therefore getting you the lowest rate possible. I was looking for a refinance loan so I took the bait.
There was a comprehensive set of questions that had to be answered when you fill out your application on the website. Presumably to help save your lender time and consolidate your answers. The whole experience took about 30 minutes. I’m not really sure the criteria that is used to select the vendor that is matched with your information. I began to wonder whether lenders that somehow managed to get on the ‘most-favored’ list got the most referrals. There really is no way to ensure that Lending Tree is on your side and trying to get you the lowest rates. You’ll have to do that yourself. The website is fairly limited after your information is captured. The strong point is that your information will be sent to the three lenders in a complete format and thus saving the lenders a lot of administration time in getting this information from you in a one-on-one or phone interview. This really should give you a better rate since the lenders save a few hours of time. I have seen some lender advertisements that offer as much as $200 off applications completed on-line.
Once you decide to go with one of the three lenders (if you decide to) there will be two other companies with all of your personal information. I definitely see that as a downside and am not sure of the responsibilities or promises that have for using that information in any sort of marketing program. Once I entered my information, there was one reply almost immediately, the second reply within a couple of hours, and the last came in a couple of days later. Almost certainly these were automatic replys as there was no difference or special discount when compared to quotes obtained directly from the website of the responding lenders (Etrade Mortgage, IndyMac Bank, and Freedom Mortgage).
I called IndyMac Bank after comparing the rates provided. I eventually got a loan through them and will review them under another review. My primary reason for selecting them was a competitive rate and they were located in California where I am.
Lending Tree has a persistent stream of emails that continually ask how the process is going. The emails ask if there is progress and if not they request feedback. This seems to be a good feature that fortunately, I did not have to take advantage of. It did give me the warm fuzzies knowing that someone was there that I could talk to if there were problems with the loan. I am not sure what the extent or effectiveness of the help would have been, however.
The rates that are quoted in the website are really meaningless until you get the ‘good faith estimate’ from the lenders. There are enough hidden fees and unstated costs that will have a significant affect on the final cost of the loan. There was $1635.50 difference on my good faith estimate and the ‘total lender fees’ presented at Lending Tree. This makes the initial email reply fairly meaningless. Base your comparisons on lenders on a written good faith estimate instead of the ‘quick’ summary of charges to compare lenders. That way, you can be fair to all lenders and compare them equally.
Your final lender will have to pay a broker’s compensation fee to Lending Tree ($408). I found all the lenders that I got a reply from were at www.gomez.com (The “internet quality measurement firm”). You are going to give them a call anyway so just cut out the middleman (lendingtree.com) and go to the lender direct and save them the commission dollars. Haggle on the costs by telling them you didn’t go through a broker and go from there.
I can’t really see how I benefited by going through lending tree since I had to call the lenders myself anyway. The biggest benefit is that it narrowed the field to three choices but not necessarily the three that would be the best for me. I also got a $250 credit through a credit card offer. That may be incentive enough for some people. It was for me. Lending Tree did not harass me with phone calls for more than a few days and of course the return calls were expected. They were reasonable and I have not continued to receive calls from them. The choice is yours, if you need a little support on your side and want some help in selecting the final choices for your loan then these guys can do it.
Recommended:
No
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Epinions.com ID:
gerardoa
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Location: SandyEggo, CA
Reviews written: 8
Trusted by: 1 member
About Me:
Married guy.
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