Best Online Mortgage Lenders of December 2023

An online mortgage is a home loan that can be completed electronically from loan application to closing. Technology takes care of most of the loan process. With your permission, some lenders can access your bank and tax records directly, saving you the hassle of digging up pay stubs, W-2s and bank statements. Others offer options to sign closing documents, including the promissory note, digitally.

The basic process for digital home loans is the same as a standard mortgage, though lenders can often mix and match the level of digital contact to your personal preferences.

The following steps are common for most online mortgage applications:

• Shop around online. Check mortgage rates online and choose your top three lenders. Or you can use an online rate comparison marketplace, and lenders will contact you with their best offers.
• Complete an online application. Most lenders offer a secure option for you to apply on their website. If you’re asked to fill out a contact form, a loan officer will call you to gather your information over the phone.
• Choose what information you want to provide digitally. This is where your online privacy and security comfort comes into play: You can choose whether to let your lender pull up your IRS tax information and view your banking information.
• Download a tracking app, if the lender offers one. Mortgage apps are popular, and if the lender offers one, you can track the status of your loan through the app.
• Upload documents if requested. If you opt out of electronically uploading your earnings and banking info, you can generally upload PDF copies of income, asset and purchase documents.
• Pay upfront fees online. If you need an appraisal or the lender charges an application fee, you’ll receive a payment link to cover the cost with a credit or debit card.
• Electronically sign your initial documents. Once your mortgage rate is locked, you’ll receive a package with documents including a loan estimate detailing all your fees. Once you’ve e-signed it, the lender can submit your loan for final approval.
• Upload the final documents and sign your closing disclosure. Once your loan is approved, you may need a few more odds and ends to upload including homeowners insurance and picture IDs. Your closing disclosure must be digitally signed before you can start your official countdown to closing.
• Complete your e-closing. Most lenders offer a “hybrid” closing, which means you can digitally sign some documents. However, the promissory note and deed of trust usually require an old-fashioned autograph using a pen.

Not necessarily. Although digital lenders may avoid the overhead costs of your neighborhood bank, they may or may not pass those savings on to you. Automated underwriting systems are often a better fit for borrowers with high credit scores and stable income; computer algorithms can’t make judgment calls for rough patches in your job or credit history.

Ask the lender how you’ll communicate during the mortgage process. The automated systems may cost you a bit of your sanity if you can’t talk to a human being or are subjected to rigid electronic turn times for every question.