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There's a fair amount of ways to refinance online via sites like Zillow marketplace and lendingtree. I'm hesitant to dive into using these services, I prefer dealing with a person directly. However I'm contemplating using one of these service for our next refinance.

Is there anything specific we should look out for when using one of these services? Will the APRs be competitive? Is there any reason to avoid such services? Are there advantages to using these services?

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If you can deal with phone calls instead of a face to face meeting, for the average person with an average refinance online tools just offer another way to shop for deals.

For new mortgages, I think having a person you can meet face to face will avoid problems, but for just a simple refi, online is one of the places you should check.

Compete your current mortgage company, your bank (hopefully credit union), a local broker or two and the online places.

The more competition you have, the more power you have in making a good choice.

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    Make sure to check the online reviews of the corporation on places like the Better Business Bureau. This is true for both local businesses and online, but it can save you a huge headache. – justkt Dec 16 '10 at 17:57
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For what its worth, I recently closed on a 30 year refinance mortage with an agent I found through Zillow.

The lender has a perfect 5/5 reputation score, whose office was located within 5 miles of my house, and as suggested by justkt on MrChrister's response, I checked out the business on the better business bureau and its online presence prior to going forward with the bank.

The process was relatively painless, and the APR and closing costs were less than my previous loan with a federal credit union which I've used in the past.

I can't say if the bank I'll be using going forward is as good as the one I've used in the past, but overall I'm quite happy with it. I never met the individual in person but this saved both of us a fair amount of time honestly.

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If you've been in your house for a few years (and have built some equity up) and the market is active in your area, online is probably fine. The local banks will be better if it's not obvious to someone in Bangor, ME that your neighborhood in San Diego is worth substantially more than the crappy area 2 miles away.

I've had 3 mortgages, one from a regional bank, one from a broker-sourced national mortgage company and another from a local bank. The bigger banks had better statements and were easier to do stuff with online. The smaller bank has been a better overall value, because the closing costs were low and they waived some customary fees.

In my case, the national mortgage company had a better APR, but my time horizon for staying in the house made the smaller bank (which had a competitive APR, about a half point higher than the lowest advertised) a better value due to much lower up-front costs.

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