The Internet makes it easy to shop for a new mortgage. You should know that Internet Mortgage lenders are just as guilty of overcharging homeowners for their mortgage loans as Banks and traditional mortgage companies. Here are several tips to help you avoid paying too much when refinancing your mortgage with an online lender.

The Internet is an excellent tool for refinancing your mortgage; you can easily compare loan offers for dozens of online lenders. When you compare online mortgage lenders, you will find they come in two varieties: the first type is a list broker and the second a retail lender or mortgage broker.

List brokers have nothing to do with mortgage loans. They simply put up a flashy website and drive customers to it while collecting their names and contact information. This information is then sold to as many mortgage lenders as possible, enabling the list broker to collect a fee. Retail lenders and mortgage brokers are more familiar; these are the same types of lender that operate offline, but have established an online presence. The advantage of using an online lender is the convenience, speed of processing, non-commission driven customer support, and lower interest rates. Online mortgage lenders like to tell you that they have lower overhead than traditional mortgage lenders and the savings are passed on to you. This is slick marketing at its finest; their overhead has nothing to do with the interest rate you qualify for.

How much can you save by refinancing your mortgage with one of the big names in online mortgage loans? It depends on how much time you have invested comparison shopping for the most competitive mortgage offer. If you read the fine print on their websites you will find they are simply acting as brokers in many of the sates they operate. If your home is in one of these States you will be charged a “co-broker fee” or “Computerized Loan Origination Fee” of as much as $800 just for filling out a form on their website. These sites do not guarantee their interest rates and you will simply be handed off to another lender.