How Getting a Mortgage Through LendingTree Works
What you need to know about the well-known lender-borrower matchmaker.
If you’re shopping for a home, then you’re probably shopping for a mortgage loan, too. In that process, you’ll likely encounter the name “LendingTree.”
Though it’s not a mortgage lender itself, LendingTree can help you find a loan to finance your home purchase. With the tagline “May the best loan win,” it’s an online marketplace that allows you to comparison-shop for various types of loans. These include mortgage loans, car loans, home improvement loans, and others.
The marketplace launched in 1998 and has served more than 100 million borrowers since. Still, despite its history, LendingTree’s service isn’t right for everyone—nor is it always the most economical choice. Are you considering using LendingTree for your home loan? Make sure you have the whole picture first.
How LendingTree Works
LendingTree aims to streamline the loan-shopping process by giving consumers multiple loans offers all with the one single-set of information. On the front-end, consumers log onto LendingTree’s website, enter some initial data, and then receive up to five potential loan options via email.
During this process, LendingTree will require data like:
- Loan type—initial purchase, refinance, home equity
- Property type—single-family, condo, or apartment
- Property use—primary home or vacation property
- Buying timeframe
- Location of the property
- Price range and down payment amount
- Preferred bank
- Household income
- Credit score
- Social Security Number
On the back-end, lenders actually pay LendingTree to have their offers fed to consumers. The lender pays LendingTree a fee, passes on their loan requirements, and LendingTree uses that data to “match” users with up to five potential loans.
Pros and Cons of Using LendingTree for your Home Loan
One of the advantages of using LendingTree is that it allows you to save time and hassle. Rather than filling out five separate forms or making five separate phone calls, you’re able to get the ball rolling on multiple loan quotes with just a single submission.
The biggest disadvantage of LendingTree is that not all mortgage lenders participate in the marketplace. That means while you might choose the lowest-cost loan offered to you through the marketplace, there might actually be a more affordable, non-LendingTree offer out there that’s a better fit.
Another big drawback is that LendingTree sells leads and data. This means once you’ve entered your information, they sell it to lenders who want to compete for your business. This often results in a barrage of emails, calls, and marketing letters from lenders hoping to sell you on their loan options.
LendingTree’s offers also come separately, via emails from each matched lender. This can make it hard to compare loan options, as each comes with different rates, points, APRs, terms, and other details. You likely need a spreadsheet or calculator handy in order to sort out the best choice.
- Convenient online process.
- Faster than getting separate loan quotes.
- Doesn’t offer access to all lenders or loan options.
- Can result in numerous credit report inquiries.
- Can result in lots of calls, emails, and marketing outreach.
- Loan offers can be difficult to compare.
Tips for Success
If you do opt to use LendingTree to gauge your mortgage or other loan options, then consider creating a spreadsheet or other document to properly compare your offers. Create columns for interest rate, APR, loan amount, loan term, point costs, and other details. Make sure you’re comparing apples to apples when looking at each loan offer you receive.
You should also have a good idea of what you’re looking for when filling out your LendingTree application form. Knowing the price range you’re looking to shop in, the location where you’ll be buying, and your credit score and household income can all help you get better, more well-suited loan options for your home purchase.
Finally, don’t put in your LendingTree application until you are ready (or very close to) buying your home. According to LendingTree itself, you will be unable to cancel your loan request without contacting each matched lender directly. You will also need to put in a new loan request if you need to update or change the data you entered on the form. Waiting until you are almost ready to buy can help reduce duplicate applications, as well as premature calls and emails from eager lenders.