"John A. Doe" wrote in message ...
We're thinking about shopping for a mortgage on the Internet. Mortgage
companies and brokers on the net seem to offer better rates than the
local banks. We're, however, concerned that there might be hidden
gotchas behind the good deals, and that we might run into scam artists.

If you have experience with Internet mortgage companies or brokers,
please share it. Was your experience good? Is there a catch to the
seemingly good deals? Do you know of a good mortgage broker/company that
you would (or would not) recommend?

Thanks for your help in advance.

We had a particularly bad experience recently with a very large,
reputable company that is offering mortgage refinances over the
internet.

They dawdled around with our paperwork and processes until the week
before our lock-out was set to expire (we were locked in at 3.9%
fixed, and rates had climbed significantly during our waiting), and
then pulled several fast ones.

First, they chose to do an "electronic appraisal" of our home rather
than the standard walk-through, in order to "save time," they said.
The appraisal came in nearly $30,000 less than a walk-through
appraisal we had done just 9 months prior.

"Oh but no problem," they said, as they were already in the process of
rewriting our loan to put the majority of the cash back we wanted onto
a line of credit -- at a higher, adjustable interest rate.

When I offered to send them a copy of the previous appraisal (not to
mention a copy of our recent tax assessment showing that the county
"awarded" us with another $28,000 of value for the upcoming year),
their reply was "we just passed a policy that prevents customers from
challenging electronic appraisals."

Needless to say, we found an alternate solution with another bank,
went there in person, and got what we needed in 10 days with much less
hassle and "finagling." (As an aside, the new walk-through appraisal
came in $15k MORE than the one 9 months ago, and that was without any
kitchen whatsoever -- as it's currently torn out for remodeling).

Both our mortgage broker friend and the bank we ultimately used said
they have had "quite a few" people come to them after going several
weeks into the process with an online company, only to find hitches in
the process -- at a point when most people would rather stick it out,
after having gone through all the paperwork hassle.

I've got to believe they're not all like that, but after having the
experience we did with a very reputable company, I'd say "buyer be
aware."

If you need more info about our experience, feel free to e-mail me
privately at relaena at yahoo dot com.

Good luck to you,
Relaena