The simple reason is: because mortgage referral sites mislead mortgage borrowers – into believing that getting a good deal on a home loan is all about low mortgage interest rates and fees.
Everything else being equal, low interest rates and low fees win, but rarely is everything else equal. Without a full analysis of your situation, there’s a chance that getting the lowest rate or lowest fee on a home loan will NOT result in the best possible deal for you.
Let’s take a closer look at these referral sites:
What’s a mortgage referral site? It’s one of those websites that ask you just a few questions about yourself and the type of loan you’re looking for, and then spit out a ton of different loan offers to you.
We’ve all seen these, right? They use catchy slogans promising you that you win when they make banks compete for your business.
How do these sites make money? From referral fees. What’s a referral? You are.
You go on their site and you tell them “hey, I’m looking for a mortgage.” They show you some quotes, you click on the quote you like (usually the one with the lowest interest rate or fees – because that’s what they make you think is best for you) and you contact that lender for more information about the quote.
By simply “referring” you to that lender, they earned themselves a referral fee. Of course, there are slight variations in their business models from one site to the next, but this is basically what they’re all about. There are hundreds of these sites out there.
What’s wrong with these sites? From a consumer standpoint, a lot.
- Who’s their customer, you or the mortgage lender? If you define customer as the one who pays them, then the lender is definitely their customer. If so, are they doing what’s in your best interest or the lender’s?
- These sites do not provide consumers, especially first-time home buyers, with the right guidance to choose the best mortgage for their needs. Why? Because they’re not in the business of getting you the best loan for your needs. They’re in the business of maximizing their referral fees. All they talk about in these sites are “interest rates” and “fees,” conditioning you, the customer, to believe that this is all that matters when getting a mortgage.
- Many of these sites don’t allow you to compare apples-to-apples. One of these sites, for example, lumps in loan offers with 30-day rate locks together with loan offers with 60-day rate locks. Additionally, many of these don’t even show you all the fees you will need to pay at closing. How are you supposed to make a fair apples-to-apples comparison if you don’t have all the information?
We’re as tired as most are of misleading mortgage referral sites that are looking to make a quick buck and pass you off to the next guy, without providing any real value.
That’s why we built a digital platform for lenders that walks borrowers through the entire process from start to finish. This efficient web and mobile-ready software helps borrowers to get all the information they need right from their lender, all in one place.
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