8 Point Checklist: Evaluating Online Vendors

Here are 8 things to consider, when evaluating lenders online:

  • Website Design

  • Privacy Policy

  • About Us

  • Popularity

  • Reputation

  • Short Form

  • Points, Fees, Terms and Rates

  • Communication

    1. Website Design:

    The webpage is, in fact, the storefront of the internet. In the real world, your first impressions make all the difference. Well, it's no different on the internet.

  • Does the site seem forth-right? Can you glean valuable information immediately, or does it appear that you are being pushed to click here, click there?

  • Does the page load fast, indicative of a reliable server, or does it seem to take forever for everything to be displayed (or worse, are you receiving various error messages).

  • Are there a ridiculous amount of pop-ups, pop-unders, and other in-your-face ad campaigns, or, does the lender simply put it all out there for you to decide?

    Examine the website design, and trust your first impressions.

    2. Privacy Policy:

    You will likely be sharing some personal information, in exchange for loan offers. You shouldn't be so concerned about this that it limits your ability to reach out to possible lenders. However, use your common sense.

  • Does the website post its privacy policy? If so, take a quick peak at it.

  • Does it seem to make sense, and is it reasonable?

    Virtually all trustworthy online businesses now have posted privacy policies to both assure you of their intent, and to comply with current laws and regulations.

    3. About Us:

    Does the lender post an "about us" page?

  • If not, this could be a red flag. In other words, the lender should take pride in its history, its vision, and its mission statement. An "about us" page is an opportunity for your lender to tell you a little bit about themselves. If you don't see it, then what are they hiding?

  • On the other hand, if you do see an "about us" page, go check it out. How long have they been in business? Where are they located? Do they post a phone number, and do they provide contact information? What are their policies and philosophies?

    Reading the "about us" page can tell you tremendous information about the lender.

    4. Popularity:

    Take your lender's website address, and plug it into Alexa.Com. Alexa is a tool, created by the folks at Amazon, to evaluate traffic on the internet, and to provide a venue for visitors to post critiques of websites.

  • Popularity is gauged by the Alexa rating, and the lower the number, the higher the rating. For example, our site, http://loanresources.net , as of today's date, has a 3 month average Alexa Rating of 86,517. This means that we are one of the top 100,000 websites in terms of traffic (and popularity). If we get down to let's say 50,000, then our traffic and popularity has increased.

  • You can use this tool to evaluate the traffic of your prospective lenders.

  • Our advice is this: Don't be blinded by popularity alone. There are plenty of competitive lenders and mortgage brokers out there with the highest integrity, which may not, necessarily, have a favorable Alexa rating. It doesn't mean that they shouldn't be considered. It is simply a measurement of traffic, and that's it. Don't miss out on what they have to offer.

    Just use popularity as one of the many tools at your disposal, when evaluating online lenders.

    5. Reputation:

    There are a number of ways to evaluate a lender's reputation. Talking to friends, family, and associates, of course, is one way. Another method is to see whether or not the prospective lender is a member of the Better Business Bureau (BBB at BBB.Com), and if there are any complaints on record filed against them.

  • The BBB produces what's called a "Reliability Report", and this report will provide you with corporate information (such as name, address, phone number), BBB membership information, whether or not the lender is a participant of the "BBB Online" program, along with a complaint history, and each complaints final resolution.

  • The report also states the overall rating that they give the lender. Remember we discussed earlier, that popularity is not everything? Here's a prime example. You'd be surprised how many "popular" lenders, may in fact carry a rather lengthy BBB Reliability report filled with a variety of complaints.

  • Again, just use your good, common sense, and consider reputation alongside all other factors.

    Also, if you see something on the reliability report that may be concerning you, talk to your prospective lender, and see if they can give you a reasonable explanation for what happened.

    6. Short-Form:

    Complete an online "short form" application, and within minutes, several competitive loan offers could be making their way to you.

  • Consider the short form application, when evaluating the lender. Is it short indeed, or are they asking you for way too much information?

  • Be expected to share some basic information about yourself, such as name, phone number, salary information, etc., but never disclose what you feel is too personal or compromising, such as a social security number, credit card numbers, etc.

  • Does the short-form make sense, is it well organized, and is it simple for you to follow and understand? This is important, because if the form is easy to complete, the lender may be saying that their whole loan process is simple and easy. On the other hand, if the form is arduous and complex, what does that tell you?

    So, evaluate your comfort level with the context of each lender's short form application online.

    7. Points, Fees, Terms, and Rates:

    After you complete the online short-form, prospective loan offers will almost instantly be making their way to you.

  • These preliminary loan offers will present you with important information about the points, fees, terms, and rates being offered.

  • This, of course, is the nuts and bolts of what you are evaluating?This is the dollars and cents of your preliminary loan offers.

  • Obtain several offers, and compare them to each other.

  • Who offers the best savings? Who seems too low to believe? Who is way too high to consider?

  • Check the current rates and see how these offers compare. We've got a RateWatch set up at our website, or, you can find other resources from any search engine.

    8. Communication:

    After you've obtained several loan offers, it will be time to talk to your prospective lenders over the phone.

  • Do not fear this process. Remember, you are the buyer of this product, and you are in the driver's seat. Think of it as an interview, and you are in charge. Ask some good questions, and see if you are comfortable with the relationship forming.

  • How does the lender strike you over the phone? Is it someone that you feel you could do business with, or, does the conversation seem forced and uncomfortable?

  • Use the phone call to evaluate the relationship, and to obtain useful information.

  • Do not make an immediate decision. Talk to 3 or 4 lenders, and then take a pause, and evaluate what you've learned.

    Use your instincts to gauge who you worked well with, and who might present challenges down the road.

    We've enjoyed providing this information to you, and we wish you the best of luck in your pursuits. Remember to always seek out good advice from those you trust, and never turn your back on your own common sense.

    Publisher's Directions:

    This article may be freely distributed so long as the copyright, author's information, disclaimer, and an active link (where possible) are included.

    About The Author

    Copyright 2004 LoanResources.net

    Tom Levine provides a solid, common sense approach to solving problems and answering questions relating to consumer loan products. His website seeks to provide free online resources for the consumer, including rate-watch, tips and articles, financial communication, news, and links to products and services. You can check out Tom's website here: http://loanresources.net, or you can email Tom at info@loanresources.net.

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