- Posted by: steve
- Category: mortgage news, mortgage rates
Having a competent service to compare mortgage rates is important. Let’s see if LendingTree is indeed the best option available.
There’s no one road to follow when looking for a mortgage.
Some choose to visit the bank they’ve done business with all their life. Others choose to shop around or take advantage of an offer. Five million people go to LendingTree, a com
Five million people go to LendingTree to compare lenders, and many walk away not only with a loan but with a better picture of their financial health.
LendingTree has a catchy slogan and a big advertising budget. But is it worth the hype? And how can it help those looking to buy a home for the first time?
The following article will answer these questions and more by exploring:
- What LendingTree really does
- How the process works
- Who LendingTree really benefits
- Advantages of logging on to LendingTree
- Potential disadvantages
- And whether it’s worth the hype
What Does LendingTree Do?
LendingTree has an all-in-one service designed for potential borrowers to examine their current credit situation and use it to their advantage when applying for new credit.
The service is famous for mortgages, but it’s available for most loan products including:
- Home equity loans
- Reverse mortgages
- Mortgage refinancing
- Small business loans
- Personal loans
- Auto loans
- Student loan refinancing
- Credit cards
There’s an option to:
- Analyze current credit and loans
- Compare existing loans against current availability
- Monitor loans to find ways to save money on interest rates and fees
- Get automatic alerts when LendingTree’s software finds potential savings
What LendingTree Doesn’t Do
LendingTree is all about information – but it doesn’t go through the mortgage application process itself.
So, while it passes on potential borrowers’ details to lenders within its network, it plays no role in the decision-making process.
How the LendingTree Process Works
The whole process is fairly straightforward.
From LendingTree’s homepage, visitors are directed to choose their preferred loan type.
Here, the borrower is instructed to choose the following:
- the type of property they’re interested in
- how the property will be used
- where the property is located
- how far along they are in the process
- the estimated purchase price
- estimated down payment
- credit score
- personal details (including social security number)
From here, LendingTree searchers lenders available in the area to create a comparison of mortgage rates applicable to the information provided.
Users who are matched with suitable rates and lenders they like can choose to move forward.
LendingTree directs borrowers to potential lenders and provides the first part of the application process. However, LendingTree doesn’t process the application itself. It also doesn’t make any financial decisions.
Instead, the site submits the application to chosen lenders on the borrowers’ behalf.
In most cases, the application is sent to three to five companies in LendingTree’s network. The preliminary application details allow the lenders to put together a quote for the borrower. However, the quote is preliminary because a full mortgage application hasn’t yet been made.
Taking the Next Steps
The process picks up steam after the application sent out. Customers may begin to receive calls from lenders as soon as five minutes after their application is submitted.
A five minute waiting period isn’t uncommon. In fact, people who use LendingTree report being entirely unprepared for the deluge of offers arriving via email and phone calls.
However, because the application was sent multiple lenders, the borrower is likely to get several phone calls.
These phone calls come in from trained sales people interested in earning the borrower’s business. They’re known to use sales tactics to convince borrowers to begin the process with them first.
Because of this, it’s important to proceed with care.
It’s easy to fall prey to these tactics, but it’s also in the borrower’s best interest to get a quote from all available lenders.
They’ll generally find that the ‘best available offer’ provided in the initial phone call can be made sweeter on the second phone call, particularly if the borrower insinuates that another lender was able to beat their quote.
While the salesmen are one of the trickier parts of working with LendingTree, those who are savvy enough to see through sales tactics will be able to get a better deal than they might have if they spoke to only one or two lenders.
In this sense, LendingTree is able to live up to its tag line – “When banks compete, you win.”
Who Benefits from Working with Lending Tree?
Many people find that on similar sites, they’re only as good as their credit score. That kind of treatment leaves those with less than excellent credit in the dust – or worse, in the clutches of predatory lenders offering outrageous terms.
This doesn’t often seem to be the case on LendingTree, in part because of all the resources available for those with poor, fair, good, or excellent credit.
It doesn’t matter what kind of credit borrowers have because LendingTree works with 1,500 lenders nationwide to provide quotes for mortgages. When estimates and quotes are provided, the kind of terms a borrower can expect are clear.
Plus, proceeding with these terms is entirely up to the borrower. It’s easy to back out at any time.
Essentially, everyone can benefit from working with LendingTree. It allows anyone to compare terms with available lenders to make sure they’re getting the best deal.
It allows anyone to compare terms with available lenders to make sure they’re getting the best deal.
Plus, there are resources available for borrowers and future borrowers to improve their financial standing and eventually access even better rates.
Benefits of Working with LendingTree
1. Banks Compete
Working with one, trusted lender works well for some. But it’s not always the best way to get a good deal.
By finding out what four or five lenders are willing to offer, it’s easier to find a middle ground and choose the right loan.
2. LendingTree Never Stops Working for Borrowers
LendingTree doesn’t look up available rates once and then never again. It continuously searches for the best rates, terms, and products for the borrower’s profile.
This is a good thing because lenders offer daily and weekly rates. While variation by a fraction of a percent or a whole percent may not seem like a big deal, it can mean paying thousands more in interest than is necessary.
Alternatively, it also allows borrowers to choose a higher rate when it suits them.
Constant updates mean it’s possible to start looking early to get a sense of what rates are available and to enjoy the maximum amount of choice before making a huge decision.
3. Opportunities for Education
LendingTree offers more than loan services; it also provides a significant focus on education.
Account holders are able to see their finances laid on on their dashboard in a way that makes sense. This page is important because many people think they know what they owe and what they own, but in many cases, their sense of their personal finances is too abstract.
Education is also available in the form of tutorials and information for improving individual or family finances. There’s plenty of guides available with practical help in regards to:
- improving credit
- eliminating debt
- saving more
- becoming an informed consumer in the realm of loans and credit
4. It Offers a Home Valuation Tool
In June 2017, LendingTree launched a home valuation feature, making valuing a home for refinancing or selling simple.
The financial intelligence program uses third party data to track the value of a home over time and predicts equity by using the existing mortgage balance.
LendingTree’s home valuation tool tracks an average of $132,000 in untapped equity, which allows borrowers to see what’s really available to them if they’re trying to consolidate debt, build more equity, or make big purchases like college tuition.
5. It’s Simple
The LendingTree interface is simple and easy to use while still accommodating for individual options common in the mortgage lending process.
It takes into consideration personal details, a FICO score, geographic location, and the kind of property involved to gather enough information to send on to lenders.
This method is useful for consumers who want to start looking at mortgages but who aren’t financially fluent enough to answer questions without extra help from a loan officer or financial advisor.
Because it’s simple, it’s also fast. There’s no need to spend an hour filling out paperwork at the kitchen table – that comes later. The whole process can be done in a few minutes with the information borrowers have at hand.
6. It’s Free
Most of all, LendingTree is free. It’s available out of business hours and anywhere there’s an internet connection.
There’s no need to worry about making a decision because there’s no loan officer across the desk and there won’t be an hourly bill from a financial advisor next quarter.
There are several benefits in using LendingTree as outlined above. Savvy users who know how to play the game can use it to get a better mortgage deal than by working with one vendor alone.
1. Borrowers will get more calls and emails than they’d like.
One potential drawback of working with multiple vendors is buyers only choose one. That leaves several other loan officers, who typically make a commission on sales, hanging on the other end.
That can mean up to four other companies likely continuing to email, call, and continue to pitch a borrower even after the process has begun with the chosen lender.
Of course, regular calls and emails don’t need to be a drawback. The solution to this problem is for borrowers to let lenders know that they’ve chosen a lender and started the mortgage application process with them.
Most lenders have a do-not-call list to prevent spamming clients as well as fines for excessive calls.
However, some customers have found that they continue getting emails long after they’ve started the process with another lender.
2. Five lenders pull one borrower’s credit.
Every time a lender pulls a borrower’s credit report, the borrower takes a small hit to their credit score.
This occurs because pulling a credit report is a sign the individual wants to take out credit. If the borrower tries to take out credit too frequently, it is a sign they don’t manage their cash well and must rely on credit cards and loans.
Using LendingTree means that five lenders will pull the same person’s credit score five times in a short period of time.
The problem with this isn’t necessarily that it looks bad to future creditors or lenders. It’s in that no one is sure how this appears on a report because credit bureaus keep their algorithms secret.
So, no one is sure whether multiple banks pulling credit scores for a mortgage counts as compiling scores for one big loan or if credit bureaus count them as separate transactions and a sign of unworthiness.
Pulling a credit score once or twice is often overlooked by banks. But it’s unclear how credit bureaus will report multiple requests in a short period of time for this purpose.
This disadvantage shouldn’t scare off potential LendingTree users. However, it’s something to consider for borrowers who prefer to keep their credit in pristine condition.
The Bottom Line on LendingTree
The bottom line is that LendingTree is an excellent tool for borrowers regardless of whatever route they choose to go. Account holders leave the site more informed about their personal finances and with the tools they need to improve their overall situation – and that’s never a bad thing.
Of course, there’s no need to use LendingTree itself to find a loan.
It’s entirely reasonable to use it to shop around or to become more informed about mortgages and the lending process before returning to a favored lender in the community.
Borrowers shopping for a home in the Palm Beach, Florida area can use LendingTree to get their finances in order before visiting New Florida Mortgage.
New Florida Mortage can help you find the right mortgage for your finances and for the property itself to make sure your most important investment is done right.
Contact New Florida Mortgage today to talk to a real human – not an email-sending bot – and learn how we can help you move into your dream home.