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.
Editorial Note: This article was published on August 7, 2014 based on publicly available information at the time of the writing. Information is subject to change, please visit Loan Pal website for latest information.
6 out 6 people found this review helpful
Loan Pal bait and switch
Loan Pal aka Paramount Equity Mortgage (PEM) is a risk you should not take. You will be wasting a lot of time, money, and causing yourself undue stress.
I contacted PEM for a refinance. I spoke to Missy F aka Melissa Megan F. I was given an excellent loan scenario followed by a Loan Estimate (LE). I specifically asked several times, "How solid are these numbers?" or something very similar. I was told, verbatim, "This loan should only get better, based on the value of your house." Let's be very clear here, I was excited about the loan, and I wanted to make sure that there would be no surprises down the road. Missy supposedly "locked" the rates that day, which should have made the values of the LE fairly stable. I understand that prices can fluctuate a few $100 based on services, but this is not what happened. You can imagine my surprise when I ended up with a loan that was worse than Missy's pie-in-the-sky LE after my house appraised for a higher than expected value.
Over the course of two months, yes TWO months, after I was told that the refinance could be done within three to four weeks, I received no less than four different LEs, all with wildly fluctuating numbers. In every instance, when a document was requested, I usually got it to them within 24-48 hours. I practically had to beg, call every day, email constantly and even had to show up to their offices just to get some answers about what was going on with the loan. They had numbers on their LEs that apparently they were not even sure how they got there. How is this possible?
Loan Pal aka PEM was so inefficient in their execution of this loan, they blew a rate lock, which of course I ended up having to pay for. They also promised to pay for the appraisal, which ended up in the fees, which means that I paid for it.
Let's list the lies that I was fed, followed by the actual outcome.
Lie #1: You are getting a 0% of Loan Origination Charge with a total closing cost of $2,564.
Reality #1: After multiple wildly varying LEs, I ended up with a 0.625% Loan Origination Charge with a total closing cost of $4,358.03.
Lie #2: We can have this loan completed within a month.
Reality #2: It took over two months. We had to pay for a rate lock extension because they blew it.
Lie #3: I locked your rate today.
Reality #3: My rate was not locked on the day indicated by Missy/Melissa. I have, as of yet, to get a clear answer on when that supposedly happened.
Lie #3: We will pay for your appraisal.
Reality #3: I ended up paying for the appraisal.
Lie #4: You can make bi-weekly payments.
Reality #4: Closing documents state that partial payments are not accepted.
Lie #5: Your loan will only get better and the numbers presented in this LE will only get better.
Reality #5: My house appraised for more than expected and my loan got worse on virtually every measurable metric.
Please do yourself a favor. If you plan on gambling by allowing PEM/Loan Pal to provide you with lending services, do yourself a favor, hedge your bets. This means, go through this process with multiple lenders at the same time. The PEM/Loan Pal offer may be the best one, but they will not follow through. They will not be timely. They will not honor their word. When they start to mess around and miss deadlines or start to change their LEs, you can drop them and continue on with a reputable company.
I timed my refinance at a good time to get a great rate offer from multiple companies. PEM/Loan Pal had the best offer at the time, and because they were so slow, I ended up having to make a decision on the other mortgage company offers. After getting multiple reassurances along the lines of, "Don't worry about the numbers, we will fix them at the end. We will take care of you," I decided to go with PEM/Loan Pal. This was a mistake, and it ended up costing me in opportunity and real money costs.
PEM/Loan Pal will lie to you. They will offer you great loan terms only to change them at the end. Don't fall for it.
Bottom Line: No, I would not recommend this to a friend
4 out 4 people found this review helpful
Don't even waste your time
I spent two months furnishing information to refinance my primary residence. This is a great example of a "bait and switch." They came in much lower than a competing lender (local credit union), but when it came time to close, they found all kinds of additional or increased charges they 'missed' initially. They said, "trust me, we will do you right." I dropped the other lender 'trusting' them up until closing. What was quoted as a credit of $300 at closing suddenly became a 'cash needed at closing' of almost $3000. People, this is a scam. Don't fall for it. Stay away!
I would not recommend this company, also known as Paramount to my worst enemy...seriously. I would go lower than one star if it would let me. "Trust me" (and you really can) you are wasting your time and energy for a terrible result. I canceled the entire transaction and found a local company.
Bottom Line: No, I would not recommend this to a friend
4 out 8 people found this review helpful
Great experience with Loan Pal!
Really happy with my loan terms and the service. I get calls back right away, and Loan Pal delivered exactly what was promised. The process was very fast and everyone was super friendly.
Bottom Line: Yes, I would recommend this to a friend
13 out 22 people found this review helpful
Scam, negative stars
Don't waste your time or money. I am too angry to even write a review. Thanks for wasting my time, Shirley at Loan Pal. Yea, and now the rates went up.
Bottom Line: No, I would not recommend this to a friend