I am a real estate broker and will share a brief summary of the collective feedback and experiences based upon transactions in our office.
Note: The ads that you see here are sometimes for a national company that have offices throughout the country.
While I have seen transactions successfully close when a buyer was using an online mortgage company, we have more often than not, experienced bumps and challenges in the process. I have been directly lied to out-of-state mortgage brokers, and generally find them less customer service orientated. For many of them, their next deal is coming from an online lead. There is a huge incentive for the online loan officer to capture the business, but not always an incentive to remain diligently customer service oriented throughout the transaction. Contrast to a mortgage broker who is building a book of referral and repeat business and you will find a greater incentive to be available and responsive throughout the entire transaction.
I have more often seen a weak or incorrect preapproval or prequal come from an online broker. Tell the "buyer" what they want to hear, but......then, in reality, they don't qualify for that program and are moved into a different loan program with higher costs. By then, the buyer is in a real estate contract and changing mortgage companies is uncommon then. The same can happen with a local loan officer. Sometimes it happens because loan guidelines change; sometimes because the loan rep is inexperienced; and it can also happen with an experienced loan officer who interpreted guidelines differently than the processor or underwriter. It can happen locally. I have seen it happen with greater frequency with online mortgage companies.
We have successfully closed transactions when the buyer used an online mortgage rep and done so without major issues. That seems to be the exception, not the norm. Maybe some online mortgage reps are also working hard to establish their own book of clients.
I am a huge supporter of using the internet to source your prospective service professional, and that includes all facets of real estate and beyond. Once you source a prospective mortgage rep, have a chat with them about their process after the loan documents are signed. How accessible will they be? Do they hand off the loan app to a processor and turn you over to a new contact?
Another source of mortgage reps will be through Realtors or title companies. When a Realtor refers a mortgage rep, ask how many closings they have done with that loan officer and for over what period of time.