LendingTree (loan, pre-approved, credit score, fees)

[Southern_Transplant]

I would like to use an online lender via LendingTree because the rate is much better. In fact, the monthly payment for the Lending Tree 30-year-fixed loan is the same as the interest-only loan from a traditional lender! What are the risks associated with an online lender and how can I reduce the chance of something going wrong? For instance, I would like some way of insuring that the online lender would not back out of providing the loan at the last minute.
We have a traditional lender but he is not very quick to return our calls. We live in an expensive area of Virginia so we only have a few lenders willing to loan a jumbo loan even to the most qualified buyers. Our debt to income ratio is 48% and our credit score is excellent. So far, the primary advantage of using a traditional lender is that it's the typical way to go and there's no fear of the unknown. I believe that the tremendous savings renders the pre-approved online loan a better option. Plus, I wonder if the skepticism of online lending is warranted. Any thoughts?

[renriq02]

I used to work at LendingTree, and their fees/rates are typically higher.

They charge you 400-600 upfront to 'lock' in your loan. They also work like hamsters...

Originally Posted by Southern_Transplant

I would like to use an online lender via LendingTree because the rate is much better. In fact, the monthly payment for the Lending Tree 30-year-fixed loan is the same as the interest-only loan from a traditional lender! What are the risks associated with an online lender and how can I reduce the chance of something going wrong? For instance, I would like some way of insuring that the online lender would not back out of providing the loan at the last minute.
We have a traditional lender but he is not very quick to return our calls. We live in an expensive area of Virginia so we only have a few lenders willing to loan a jumbo loan even to the most qualified buyers. Our debt to income ratio is 48% and our credit score is excellent. So far, the primary advantage of using a traditional lender is that it's the typical way to go and there's no fear of the unknown. I believe that the tremendous savings renders the pre-approved online loan a better option. Plus, I wonder if the skepticism of online lending is warranted. Any thoughts?

[Southern_Transplant]

Originally Posted by renriq02

They charge you 400-600 upfront to 'lock' in your loan. They also work like hamsters...

Do you mean that the loan consultants have a constantly fast-paced work environment?

The LT consultant just called and said the lender guidelines on LTV have changed and that the second mortgage part of the loan must be 70% LTV instead of 75%. Do guidelines literally change over the weekend? This sounds a little fishy. Fluctuating rates I understand; I am surprised to hear the guidelines are also volatile.

With your knowledge as a past employee, would you advise a friend to get a LT loan or to stay far away from it?

[renriq02]

Guidelines have been changing over night with most lenders.
I dont know your loan scenario so it will be hard to tell you where to go.

I would need
1. Loan Amount
2. Purchase price IF purchase or Appraised value IF refinance
3. Credit score
4. full doc or stated?
5. County/state?

Do you mean that the loan consultants have a constantly fast-paced work environment?

The LT consultant just called and said the lender guidelines on LTV have changed and that the second mortgage part of the loan must be 70% LTV instead of 75%. Do guidelines literally change over the weekend? This sounds a little fishy. Fluctuating rates I understand; I am surprised to hear the guidelines are also volatile.

With your knowledge as a past employee, would you advise a friend to get a LT loan or to stay far away from it?

[TimtheGuy]

Lending Tree...are you nuts? Find a real lender.

[rcarrillo]

Originally Posted by Southern_Transplant

Do you mean that the loan consultants have a constantly fast-paced work environment?

I think he means its a shop that churns through leads and sells them to the 5-10 people willing to pay. That can be good, but it is NOT always true that competing banks means you win. It means the person that is willing to say what you want to hear or work best on price (which is not always equal to service) may win. Getting them to live up to their promises is another story.

Originally Posted by Southern_Transplant

Do guidelines literally change over the weekend? This sounds a little fishy. Fluctuating rates I understand; I am surprised to hear the guidelines are also volatile.

Have you missed all the news about 100% financing being almost gone, stated income being restricted, higher credit score requirements and the 100 other changes in guideline changes in the last 6 months? Then count yourself lucky, the media wont stop teh 24/7 coverage in most cases .

Not sure on the exact guideline, but yes lenders are changing rules and rates every day (or multiple times a day) now. The main thing is to find someone you trust and gives you service and value, being competitive on price is always very important but does you little good if it ends up being the wrong financial product for your needs.

[TwiloMike]

Originally Posted by Southern_Transplant

I would like to use an online lender via LendingTree because the rate is much better. In fact, the monthly payment for the Lending Tree 30-year-fixed loan is the same as the interest-only loan from a traditional lender!

Doesn't that sound too good to be true? Yeah, think about that for a second. Then read the fine print.

What are the risks associated with an online lender and how can I reduce the chance of something going wrong? For instance, I would like some way of insuring that the online lender would not back out of providing the loan at the last minute.

Depending on circumstances that may be beyond the lender's control no lender (traditional or online) can 100% guarantee that the loan will be provided.