I am interested in hearing success/horror stories relative to procuring a mortage lender from listings via online (ie. yahoo finance, etc). Is there an inherent risk with such companies versus a local bank?

I've come across a couple of people who have gone through online mortgage lenders. Their stories would make for movie scripts far more terrifying than anything Hollywood has yet to put up on the silver screen. But in all fairness, it would only seem logical that there would be fair, understanding and cooperative mortgage lenders online as well.

I'm not necessarily a big fan of local banks though. Unless it is truly a LOCAL independant bank, you will have to deal and abide by policies and criteria set down by head office in some gilded tower in a far away city...or even another country.

Having dealt with a great many realtors and developers over the years the one constant recommendation I keep hearing from them all regarding financing a property is; go to a local mortgage broker.

Mortgage brokers supply funding from any number of different sources. It might be a local company looking to invest its retirement plan funds into a secured venture, or a retired couple wanting the surety of a secured investment which pays more than the going bank's savings rate. Most of the time it's a case falling in between those two scenarios which is supplying the funds for lending.

Over the years I have found that mortgage brokers tend to have the most flexibility in the loans they orchestrate. They will even act as an impartial intermediary, if and when needed. (Like when your company goes on strike for 3 months and you have to tell your lender that they ain't gettin' their mortgage payment this month cuz the kids haven't eaten yet.) Try explaining THAT to Chase Manhatten.

Quite often the initial lender is also rather understanding of the situation since they've more than likely been there themselves at one time or another in the past. Your mortgage broker will usually draw up a schedule for you where (validly) missed payments can be repayed over time, without leaving the family to live on Kraft dinners.

On the flip side, prepaying or overpaying your mortgage is usually a whole lot easier with a private lender as well. Often with little or no penalty. This comes in handy if you stumble into an inheritance or an unexpected windfall and choose to blow off a big chunk of the mortgage.

Just a suggestion GR, hope it helps.