Many people look on the internet and apply for an online home mortgage loan. There should be some kinds of advantages and disadvantages while applying for these kinds of online home loans as compared with a brick and mortar mortgage loan company. Before you connect to the internet and apply for the online home loan, here are few important things that you must know.

• Advantages of online home mortgage loan:

Application process of online home mortgage loan on the internet is not only easy but very convenient. The process has been made very simplified if compared with the brick and mortar mortgage Loan Company. You don’t have to go and meet anyone personally and answer a variety of questions that can be sometimes time consuming.

There are lots of online home mortgage loan companies and that being said, there is a tough competition between different companies to grab their customers. Customers look for some added features when they apply for the loan. Different online home loan companies try to retain their customers by offering different options like flexible payment terms and low interest rates.

The corresponding costs and fees charged by the online home mortgage loan companies are much cheaper than those who offer loans offline. People with bad or very little credit history often get approved by an online home mortgage loan company. They may charge a high interest rate on these people with bad credit history who usually don’t get approved for a mortgage when applied offline.

You can immediately check the status of your online home mortgage loan. If you get approved, you are sure to get the loan as soon as possible. There is no waiting period as compared with other companies offering loans offline. When applying for the loan online, if you are rejected by one company, you can start searching for another online home mortgage loan company.

• Disadvantage of online home mortgage loan:

While there are so many online lenders, not everyone is doing a legit business. You should be aware of the fact that when you are applying for a loan online, you should not be paying any upfront fees before the loan even gets approved. If any online lender asks you to pay anything upfront, beware.

When applying for the loan online, you should understand the terms and conditions carefully before submitting the application form. If there is any term that you have not understood clearly and submitted the application form in a hurry, there may be chances that you will be charged some kind of high fees which you may not have read, but agreed when you were submitting the application form online. It’s difficult to find compensation for whatever damage or problem it might have caused you.

Not all online loan lenders are represented in all the US states, and so before you apply for an online home mortgage loan, be sure the state that you are in have their representative.

It was only a few years ago when someone could get zero down mortgage financing with sub 600 credit scores. Fast forward to 2010 and mortgage guidelines have become much more strict making 100% financing increasingly more difficult for most borrowers to obtain. Still, there are a few mortgage products in the marketplace that provide 96.5%-100% financing. The most popular of these products comes courtesy of the Federal Housing Administration (HUD). FHA mortgage products allow for home financing with as little as 3.5% down and can offer a higher cash-out equity threshold when compared with Fannie Mae and Freddie Mac agency products. And while FHA loans are far from the subprime products of the past, they do offer slighted more relaxed underwriting guidelines than many other mortgage programs out there. FHA loan can be used to finance 1-4 units primary residences and there are even FHA mobile home loans available.

The two most popular remaining 100% financing products are USDA rural housing loans and VA loans. VA loans are a zero down mortgage solution which are designed to help qualifying active duty servicemen and women, veterans, and surviving spouses purchase real estate with little to no money out of pocket. These are made available by approved lenders and are guaranteed by the United States Department of Veterans Affairs. USDA mortgages, administered by the United States Department of Agriculture Rural Development, are designed for lower income individuals who are looking to purchase properties in rural area of the United States. Eligibility is impacted by both a borrower’s income and the home itself. According the USDA’s web site, applicants can only earn up to 115% of the median income for their area. Loan programs are for 30 years and there is no down payment required. Borrowers can search for a property by its address on the USDA site to see if the home is in a USDA eligible area.

There may be some other low and no money down outlets available from local banks, credit unions, private investors, and state and local government agencies. Talk to a mortgage professional in your community to determine what products best meet your financial goals.

Have complete knowledge about the mortgage loans: Mortgages can be very confusing especially for the newbie. One who is new in the world of real estate lending will get bewildered with the terms like home equity loan, second mortgage, home equity line of credit and credit score and its effects. You have to stand as an educated customer before applying for any kind of mortgage deals.

Examine your capabilities: Before comparing your choices, you need to be sure that you have the capabilities. You need to know your capabilities as a credit holder and whether you can qualify for a mortgage? If you can qualify for a mortgage, will you be able to afford the monthly payments? You should also be aware of the risks and responsibilities of getting a loan.

Examine your alternatives: Before you apply for a mortgage, give a serious thought whether you really need it. See if you have other alternatives instead of getting a loan. Choose from the available financial resource choices before you finally apply for the mortgage because it is a long term financial commitment.

Check your credit scores: Your credit score is very important when you apply for any kind of loan or credit. Based on your credit scores, you will be granted new credit or get approved for a loan and the interest rates will be applied. If your credit scores are not good, you will be charged high interest rates.

Improve your credit scores: If you do not have a good credit scores, then you must first work on it and improve it. Based on your credit scores, the lender will charge you competitive interest rates.

Shop for choices in your local area: Try to find a local mortgage company in your area rather than looking for some company in a different location not within your reach. You should first shop with your bank where you have your savings or checking account. They might offer you attractive mortgage packages.

Shop for choices on the internet: Do not limit to the choices in your vicinity. Browse through the internet and find out a variety of lending institutions that may provide low interest rates too.

Consult an expert: Before you make the final decision, consult an expert to analyze your choices and make the best financial decision according to your requirements. It may be a friend or a relative, or it may be a real estate consultant in your area.

Settle only for the best: Do not just grab any offer that comes in your way. There are many mortgage options and different lenders who are ready to offer you the best deals on their table. You need to consider the interest rates, the required collateral, payment schedule and the forbearance agreement.

Learn to negotiate: When it comes to real estate deals, you should be able to negotiate better with the lender. You will be paying interests on the loan offered to you. So don’t settle for whatever is offered to you. Ask and negotiate in order to get the best deal.