(October 8) -- Borrowers are increasingly embracing online lending and the choice, convenience, and competitive pricing it provides. Even borrowers who prefer traditional brick-and-mortar lenders often use the Internet to research interest rates and access free tools and calculators. Online lenders such as Quicken and E-Loan offer resources including toll-free numbers; chat rooms; and rapid e-mail response that offers borrowers the comfort of person-to-person interaction.

Online originations are expected to jump from $13.4 billion in 2000 to $110.3 billion this year and to reach $246.3 billion in 2005, according to Tower Group senior analyst Craig Focardi. However, Focardi says borrowers who don't feel comfortable with online applications should stick with a traditional lender. They should look for a company that uses the Web to make the process as fast as an online lender, but has the local market knowledge and presence that online lenders lack.

Ultimately, Focardi insists customers familiar with both the Internet and the mortgage process will benefit most from an online transaction.

Source: Detroit Free Press (10/07/02); Pittman, Jennifer