About Loan Pal
Whether you’re looking to refinance or purchase a new home, Loan Pal claims to be a direct lender that’s changing the industry by giving you everything you need to find the perfect loan online. As such, Loan Pal claims to provide you with a fast, easy, and totally transparent loan process that reduces (and in some instances eliminates) the costs associated with traditional mortgage companies.
With low interest rates and real estate prices that are quickly rebounding, if you’re in the market for a new home or looking to refinance your existing one, you probably already understand the hassle and frustration that can be associated with obtaining a mortgage. But does Loan Pal really represent a new way of doing business, or are their services just more hype? Read on and let’s find out.
How Loan Pal Works
At its most basic, Loan Pal claims to put you in control of your mortgage from start to finish by removing salespeople from the equation. In other words, Loan Pal claims to be built around the understanding that you know what you need, what you can spend, and how you want your mortgage to work, so they give you all the tools you need to find the right loan and to customize your rate. And without a salesperson in the middle, they’re able to provide low (or no) associated fees.
The Loan Pal Mortgage Process
According to the Loan Pal, you can customize your mortgage in just 5 clicks, without all the smoke and mirrors of traditional lenders.
In order to begin the process, you’ll first need to choose if you’re looking to refinance an existing home or to take out a mortgage on a new one. Then, you’ll need to select the state in which your home is located, as well as the price and down payment amount. Finally, your custom loan results will appear, which will include key information such as monthly payment, interest rate, and other details like closing costs, loan to value ratio, cashout amount, and more.
Next, in order to adjust the rate and terms, there are two sliders that allow you to customize your loan’s details: Lower Rate vs. No Fees, and Shorter Term vs. Longer Term. Here, you’ll also be able to choose between fixed-rate and adjustable rate mortgages (ARM).
Finally, once you’ve dialed in the details of your mortgage, you can click on the “Click Now” button, at which point you’ll begin the formal loan application process.
After your loan is locked in, the Loan Pal service team will fax over a needs list, which will advise you of any documentation that’s required in order to complete the loan process. If everything goes as planned, Loan Pal claims that most of their mortgages close in about a month, although the service team will keep in touch with you throughout.
Loan Pal Rates & Fees
Loan Pal claims not to charge any loan, title, lender, escrow, or appraisal fees on any of their loan programs, and they even offer a no closing cost option. However, the company claims that if you’re happy with your mortgage rate you should lock it in as soon as possible, as rates can change daily.
Important note: According to the Loan Pal website, “The borrower is responsible for payment of the per diem interest, property taxes, insurance premiums (if due) and any fees used to establish escrow with a third party.” As such, although Loan Pal may no be assessing you fees, this doesn’t mean that you won’t have any out of pocket expenses before you loan is finalized.
If you need help completing your loan application or have any questions, you can contact customer service at 844-LOAN-PAL.
Should You Use Loan Pal for Your Next Mortgage?
With all of this in mind, is Loan Pal really changing the industry and are they worth the time and effort? Maybe, but read through the following before applying for a loan:
First, keep in mind that Loan Pal mortgages are only available in AZ, CA, FL, UT and WA. As such, if you live in any other state, you’ll have to choose another lending option.
In addition, if you’re looking to obtain per-approval for a loan, you’ll need to contact customer service, as this isn’t available online.
Although Paramount Equity Mortgage, the company that operates Loan Pal, holds an A+ rating with the Better Business Bureau, their online reputation appears to be mixed. As such, some of the most common complaints reference high-pressure sales tactics/frequent calls to proceed with a loan application, slow responses to customer service requests, and long closing times.
Questionable Business Practices
Even though Loan Pal currently only operates in five states, they’ve already come under fire in WA. This is because Paramount Equity Mortgage was fined $500K by the Washington State Department of Financial Institutions in 2008 as a result of “Deceptive fee disclosures, collected unearned points and fees, and false advertising.”
Although this doesn’t mean that they’re still engaging in these behaviors, it’s still something that should remain in the back of your mind.
Bottom line: Although Loan Pal claims to be changing how the mortgage industry works, there doesn’t seem to be anything that really differentiates the company from the competition. You’ll likely still experience long closing times, fees in some instances, and even high-pressure sales tactics, which is one of the primary things Loan Pal claims to help you avoid.