Jim told his readers about his experience with LendingTree and he was pretty impressed with it. I was also impressed with it when I did my mortgage refinance a couple of years ago.
Jim's article is good (as always), but I disagree that the banks aren't competing for your business. On the contrary, they're competing very aggressively for your business. LendingTree is not so much a “search engine for mortgage loans” as it is an owner of patented automated loan-facilitation technology and a seller of mortgage loan leads. LendingTree used to list the fees that they charge their lender affiliates on their website — I can't find them anymore — but I do remember that there was a substantial setup fee, a per-lead fee, and a closed-loan fee. Long and short is that the lenders pay dearly for your information as a prospective borrower, so they'd better get on the phone with you before the electrons get cold in their e-mail. If they don't, another lender that got the same information they did will. If you opt-in for quotes from GetSmart — another lead source owned by LendingTree — the competition is even more fierce. Man, oh man, did I get calls!
One thing that some of the lenders try to do is pass on the costs that LendingTree charges them to you in the form of various and sundry “loan fees.” Using LendingTree is free to you as a prospective borrower, but as I mentioned above, it's not free at all to the lender — hundreds of dollars. LendingTree does demand that lenders not ask for “upfront insurance” or the like, but that doesn't stop lenders from charging fees at closing that offset what they must pay LendingTree. Caveat emptor.
The refinance loan I got was at an excellent rate but the closing was a little bit rushed. That wasn't LendingTree's fault, though — the lenders did indeed compete, and I did indeed win. I'm glad I used LendingTree.
Now, about those free gift cards. If you're in the market for a refinance or a loan, LendingTree is a good way to get a bunch of good offers really fast. You have Jim's recommendation, and you have mine. What more do you need, really? 😉
I'll show you a trick to get free gift cards for using LendingTree to get quotes for your loan. Join MyPoints, click on the “Home & Garden” link in the “Shop by Category” section, submit your information to LendingTree, and you get 250 points. (As of August, 2007.) That's a third of the way to a $5 gift card. If you close a home loan through LendingTree, you get 10,000 points. That's enough for about $60 worth of gift cards. Lastly, if you buy or sell a home with a real estate agent on the LendingTree network, you get 25,000 points. That's enough for over $150 worth of gift cards!
(There's a lot more to MyPoints than LendingTree, though. You can work your way pretty painlessly to free gift cards just for reading e-mails. You don't have to submit any information or sign up for anything. Just read e-mails and you'll get there.)
Or, if reading e-mails for points isn't your thing, and you're still in the market for some good loan offers, then just check out LendingTree Mortgage Loans right here.
Awesome! I knew Lending Tree had to be making a ton of money from their service, I just never thought about how much they make or exactly how they do it. This sounds like a great business model that actually works for all parties. Interesting post.
MBH,
I have to strongly disagree with you. Competition between LendingTree lead-buyers is no fiercer than anywhere else in the mortgage industry. The lenders that buy leads from LendingTree have little or no idea what their competition is charging; such a situation does not lend itself to efficient competition.
Instead of plugging your person info into an online form to then be sold, and sold, and sold again…here's another approach. Grab your local phone book and find the section for Mortgages. Cross reference the -local- companies you find with the certification list from the National Association of Mortgage Brokers ( <a href="http://www.namb.org)” target=”_blank”>www.namb.org). Pay the resulting companies a visit, give them each a good idea of your credit score, income, and assets, and request a Good Faith Estimate (GFE). Take the best looking GFE you receive and share that with the apparently higher priced lenders. Repeat until none of the lenders will go any further. Then pick the lender you trust most who is willing to give you the best deal.
Education and experience are important. Communication skills even more so. Shopping for a loan online is a risky activity in my opinion. You need a lender who will sit across from you at the closing table and be personally accountable for anything out of place.
Regards,
<a href="http://www.QuarterlifeFinance.com” target=”_blank”>www.QuarterlifeFinance.com
I have to disagree with you as well, Lending Tree retail loan department, charges more points and fees than 80% of of Mortgage Brokers… Just their junk fees are over $3000 on every loan no matter what loan amount.
Good points although I disagree on a few. I do respect your opinion however. Read more on the following topics Mortgage watchdog, mortgage advice, mortgage tips, review, low interest rate, fha help, avoid fraud, first time home buyer, cheap mortgage on http://www.brokerpolice.com