You’ve seen the commercials on television: “When mortgage lenders compete…” Should you use a website like this to refinance your mortgage? These sites can be a good resource for refinancing if you read the fine print. Here are several tips to help you avoid being stung with a “Computerized Loan Origination Fee” when refinancing your home loan.
You might be surprised to learn that the majority of mortgage sites on the Internet have absolutely nothing to do with mortgage loans. These companies put up a website with a contact form for harvesting information, advertise on television and sell the information they collect to every mortgage lender willing to purchase it. The problem comes from a handful of these well known sites that receive “Computerized Loan Origination Fees” from the lenders that purchase your information. Here’s what you need to know about this fee.
Take a look at the website of the well known mortgage company that advertises on television that they’ll get lenders competing for your business. At the bottom of the page you’ll see a link called “Licenses & Disclosures.” About halfway down the page in the middle of all the legal mumbo jumbo you’ll find disclosure of the fee they receive for selling your contact and financial information. This particular “lending” website receives a fee of $1,300 for their part in “arranging” your new mortgage loan.
You might be asking yourself “If the lender pays the fee, what’s the problem?” The problem with these so called “Computerized Origination Fees” is that the charge is passed on to you on your Good Faith Estimate. This is money that you’ll be required to pay at closing because you put your name and address in the contact from of the wrong mortgage website. The bottom line: always read the terms and conditions before you fill out a contact form on any mortgage site.
You can learn more about refinancing your mortgage while avoiding costly mistakes like computerized loan origination fees with a free mortgage tutorial.
