Is a fast mortgage better? Pros and cons
We’ve all seen the commercials for Rocket Mortgage, “push button, get mortgage”. Very clever. And, with the average length of time to get a mortgage 44 long, stinkin’ days, who doesn’t want to speed things up?
Pay more attention to the deal than the speed
Here’s the thing – a mortgage is a long term commitment, so speed should never take priority over the deal that you get. Let’s say you were able to get a mortgage at a slightly lower rate but it closed in half the time. You could end up paying literally thousands of dollars more over 1, 2, 5 or 10 years. Are a measly few more weeks worth thousands of dollars?
Speed is sometimes just advertising
I can’t speak for Rocket Mortgage, but mortgages take a long time because they are complicated transactions involving hundreds of thousands of dollars and multiple parties. One of the reasons that the mortgage process takes so long is because the government backs 90% of them and they have their own checks and balances. It seems like every day there’s another company claiming how fast they can get you a mortgage, but the mortgage industry has a long history of bending the truth.
Speed can mean less time to shop around
The holy grail of the mortgage industry is to get you in as a lead and make sure that you don’t go anywhere. That way, there’s no competition for your business. More competitions for your business means you get a better deal. Mortgage companies always have some wiggle room but they won’t use it if they don’t have to! What better way to ensure that you don’t shop around than to make the process so fast that you can’t go anywhere else? Make sure that you first shop around, regardless of how fast your bank moves.
Do you want to learn more about how to make your home a financial success, no matter how fast you get your mortgage? Read about our new book: Avoid the Money Pit, Turn Your Home into a Financial Powerhouse. It’s available now in both digital and print copies and takes you through everything you need to know about making your home a financial success in the short and long term, without getting taken advantage of.
How long did your mortgage take? Leave a comment below and tell us.