LendingTree.com
 

Has anyone tried using LendingTree.com to get miles for a Mortgage or Real Estate Agent transaction? If so, how was the experience? A couple of my friends have tried it and said it is well worth it, especially to use a Real Estate Agent. Any thoughts????

I've used lending tree to refinance twice.

It's easy and rates were comparable or better than others.

And the second time, I got 22k UA miles. It works. I'd do it again, but I doubt rates will ever drop lower than what i got 2 months ago.

Used it to refinance two and a half years ago, it worked like a charm -- I got three or four good overs, did the whole deal by email and fax, and got 30,000 DL Skymiles out of it. I'd absolutely do it again.

Thanks for your help!!

I used them once, received one offer from e*trade financial and was stupified to find the e*trade commission paid to lendingtree.com as part of my closing costs.

That's rediculous and not worth the miles! In such a case, why didn't you just make beeline direct to etrade and cut lendingtree completely out of the picture?

I know I'm covering some old ground here, but I strongly suspect that the deal you get at Lending Tree isn't as good if you are getting miles for the transaction. A year or two ago, I tried to scientifically prove this by simultaneously entering two similar loan requests, one directly through Lending Tree (no miles), and then one through the Northwest Airlines gateway to Lending Tree, but the system caught me and nullified the second request.

As I recall, this has been discussed before, with strong opinions on both sides but little evidence on either. It would be a very interesting experiment if two independent FlyerTalk members with similar credit ratings and located in the same state applied for similar loans, one with the miles and one without. I'd love to know what resulted. But in the meantime, my gut feeling is that you pay for your own miles on Lending Tree, and in my past transactions with them, I've foregone (forewent?) the miles.

We got miles for our home purchase, but the agent said he would have given us a cut of his commission instead, which would have been worth more.

QL

I have an ownership interest in a miles-for-mortgage program that is competitive to lendingtree, so I will tread carefully and not make any commercial statements here, but suffice to say, LendingTree's mileage rates are generally higher than rates or programs available without miles - also when using LendingTree, pay close and careful attention to the ratings of the proposed lenders before exchanging information with them...those ratings, although not always a guaranteed indication of the quality of service you will receive, are a good way to filter out lenders/brokers who can turn your transaction into a nightmare. I know a few folks who learned that lesson the hard way.

When running the numbers, always factor in the length of time you plan on keeping the loan. A shorter timeframe will minimize the total impact of a higher rate, which balances against the value of the incentive - a longer timeframe will cost you alot more in interest than the value of the incentive you are receiving.

Read the terms and conditions of LendingTree's program to understand how they make their money, and then you can figure out that the cost of the miles has to be padded in the rate or fees somehow. Remember, nothing is for free.

I actually have an interest in LendingTree...I have a fairly strong interest since I am an employee. :) In speaking with one of the moderators, we agreed that I may be able to provide some insight into the program.

In response to the previous statement by bocastephen, I agree that you need to factor in the length of time in determining the value of miles you will receive versus the overall value of the loan. However, I don't think that a person should sacrifice their interest rate in favor of mileage, except in exceptional situations. (Maybe you will only be in the home for a few years and you could really use the extra plane ticket). The number of customers seeking shorter term or adjustable rate mortgages is definitely growing as more and more homeowners learn about the process and the large amount of money which can be saved if the loan program fits their needs.

In response to many other postings throughout the FlyerTalk Forums, the rates and fees received by customers associated with the airline partners should be no higher than a regular LendingTree customer for a couple of reasons:

-in many cases, Lenders are not aware that the customer is even affiliated with an airline program. They may not find out that the customer is due miles until after the closing.
-the cost of any and all miles which are given to a customer through LendingTree is paid by LendingTree, not the Lender or Real Estate agent. LendingTree does not pass these costs on to Lenders and therefore, Lenders have no reason to pass any additional costs on to the consumer.
-The same lenders are used for LendingTree requests and requests associated with an airline.

Thanks for taking the time to read this. As I mentioned at the beginning of this post, I am not here to sell you on LendingTree-just wanted to clear up any misconceptions about the program. If you have any questions, let me know. Sorry this post ended up so looooong.

Eric

I hate to keep going back to this, but let me quote from the lendingtree disclosure (the California good faith estimate addendum):

GFE ADDENDUM
DISCLOSURE AND FEE ACKNOWLEDGMENT

I/we understand that as compensation for its services as a mortgage broker, LendingTree will receive a mortgage broker fee of up to $925 from the Lender upon the closing of my loan. The actual amount of LendingTree’s fee is disclosed on the Good Faith Estimate you will receive from the Lender after your loan application is submitted. This is the total compensation LendingTree will receive from the Lender for its services and is paid by the lender. The Lender includes the fee that the Lender pays to LendingTree in your interest rate, points, fees and terms of the loan. I/we acknowledge that this mortgage broker fee will be paid to LendingTree outside of closing and that there is no other mortgage broker fee agreement between us.

LendingTree does not make mortgage loans or commitments.

LendingTree is a Licensed Real Estate Broker, CA Dept. of Real Estate, (916) 227-0931, License No. 01230150

now buying these travel awards is a fairly expensive proposition. If lendingtree is earning only $925, I would consider it almost impossible for a profit to be made once the cost of the incentive is deducted. This would lead me to believe that while the disclosed broker fee is only $925, there is probably a fair amount of yield spread built into the quoted rates, hence the assumption of a rate somewhat higher than the absolutely lowest available rate. It is probably the yield spread that is being used to pay the lendingtree broker fee and the travel award. So, true, you can say that the rate for a loan with travel awards might be the same as a loan without, I would propose that the loan rate from a competent, skilled broker mined from a variety of wholesale sources could be lower than lendingtree's rates.

That is a good point. Actually, Lenders in all states pay us a broker fee for closed loans or we would most likely go bankrupt. I would also like to point out a couple of items in this disclosure:

-The disclosures, terms of use, etc. are the same at LendingTree.com as they are through any partner, which illustrates my point that Lenders do not pay any additonal fees to LendingTree when working with a customer through an airline program.
-The actual amount of the 'broker fee of up to $925' is determined by the amount of the loan and is rarely that high.
-"This is the total compensation LendingTree will receive from the Lender for its services and is paid by the lender." This states that the Lender cannot pass the cost on to the consumer. Therefore, this cost is incurred by the lender.

As a person with an interest in a competitor to LendingTree I would expect nothing less than negative opinion of our program and I respect your loyalty to your own ‘Miles-for-Mortgage’ Program…whichever that may be.

Thank you for the response bocastephen. Let me know if you have any other questions.

Eric

Thanks to the two experts in the business contributing to this discussion. I have a question for you:

A reader of my website told me that he was obtaining a home equity loan from a lender offering miles. He indicated that the salesperson he spoke with advised him to take out the maximum amount possible on the loan to get the most miles, and then immediately pay back what he doesn't need. So, are there extra costs for the extra size of the loan other than the cost of interest for a few days? Do larger loans generate larger interest rates or more points, or the like?

Thanks.

sorry, this will get abit long-winded...

well, I don't have a 'negative opinion' of lendingtree...I am just offering information to ensure consumers make an informed choice and remember that you don't get something for nothing. The lenders may not pay an additional fee to lendingtree for a mileage-earning mortgage, but the lender or broker can pad the yield spread to offer a standard appearing loan rate while ensuring enough profit to cover the travel incentive. The customer might have qualified for a lower rate with less spread. The cost of the fee might be covered by the lender, but it is certainly being passed on to the consumer indirectly through the rate - which is the essence of yield spread premium pricing. If the lendingtree fee is less than $925, it would seem even more difficult for me to comprehend how the travel awards are being paid for unless there is premium pricing somewhere - you can't pay the airline for the miles with thin air.

Gary, now to your reader. Without knowing the broker or lender, or how they price their closing costs, I can say that a couple things might be going on here. Most closing costs on a mortgage are fixed, although some items, like pre-paids, will vary with the amount. Given this is a home-equity loan and the property is not changing hands, I will take a guess that the closing costs should be similar regardless of the loan amount. The reader should have a good faith estimate for both loan amounts they are considering to compare. Now, the larger loan amount could make a difference to the broker. If he is charging yield spread (most likely, if no broker fee is on the GFE), then his earnings will definately vary with the loan amount. Most brokers won't disclose their back-end fee (yield spread), but it's always worth a try to ask and make sure it's not something outrageous. The broker will definately earn more from a higher loan amount, but provided there is no pre-payment penalty and the closing costs are the same, it should be OK for the reader to do this. Just make sure the excess is paid quickly so the extra interest expense doesn't wipe out of the value of the extra miles.

Gary- you may also want to mention that the reader's payment will obviously be affected by the larger loan amount on a Home Equity Loan. If this is a fixed payment, no matter how much he pays up front to save money in interest over the life of the loan, he will continue to make the same payment on the larger loan amount (i.e. payment on a $100,000 loan vs. a $20,000 loan). I can't speak for all programs, but I assume most mileage programs are similar and if the reader would not be opposed to taking a Line of Credit with a variable rate, his payment will immediately be reduced once the loan amount is paid down (a HELOC can be risky since rates are on their way up, but is still a sound investment). I know there are people who get a Home Equity Line of Credit through LendingTree with no closing costs, receive miles after closing, and do not even use the line of credit. Some lenders require that you borrow a minimum amount to receive the lowest rates and in that case, they would 'borrow' from their line of credit and pay it back immediately with no pre-payment penalty.

Bocastephen - The reason LendingTree and our Lenders do not charge a larger amount in fees/rates for loans associated with a mileage program is that any volume or closed loans associated with these programs are only a small fraction of the total volume/closings for LendingTree. Therefore, there is no reason to charge a larger amount to the lender or customer for such a small fraction of the business. Once again, in some cases, our lenders are not even aware that the customer is a part of a mileage program when they submit (in which case they would have no reason to charge a higher rate or fee structure to the customer) although they do have access to the source of their request. Does the 'Miles for Mortgage' program that you have an interest in charge any additional fees/higher rates for loans associated with that program?

Eric

Yes, I was assuming this was a flexible loan or something similar to a line of credit. Hopefully the reader realizes that his monthly payment would vary with the loan if it's a traditional fixed term product - but the loan costs (rate, points) should be the same. There are some loan products that offer pick-a-payment options (reduce the payment to match the true balance). Comparing the two loan options side by side with their good faith estimates would be very important before making a decision. If the loan is not flexible, then the customer would make the higher payment, but for a significantly shorter period of time. I would also ask to see the amortization schedule for both loan options with the extra large pay-back amount reflected in the table to compare total costs.

As for me, I do not charge a premium for a mileage earning mortgage. The rate is the same either way. Paying the travel incentive for me is a simple marketing cost. Most brokers spend money on buying leads - by the time a deal is reached, a typical broker might have spent almost $400 on leads. I prefer to work more efficiently. Rather than pay the $400 of my revenue to a lead source, I offer travel rewards, so hopefully the customers come to me. I rebate back a portion of my commission to the customer in the form of a travel incentive. The lender has no interest in this, nor do they even know or care this happens - so they do not adjust the rate. My yield spread rebate remains the same regardless if customer wants miles or came to me through a referral and is not interested in miles. There is no difference in loan price, except the referral who does not want miles would result in more income to me. My average gross earnings on a loan is about 1 to 1.25%, which is a fair and reasonable target.

As someone who is an admitted novice in this world but is in the market for a mortgage, may I pose the following q? Can any of these get miles for mortgage lenders possibly be cheaper (rate, apr, closing, no pre-payment penalty et al.) than just going to bankrate.com and finding the least expensive mortgage for your, with your terms? I mean this honestly as I really do not know. Will these brokers/lenders (or whatever they are) match my cheapy no name mortgage?

The lenders I work with generally offer the lowest wholesale rates, so if a customer received a rate quote from another broker, I should be able to match it - if the quote was real. Keep in mind that many brokers will "low ball" a rate to keep you interested, then as the application moves along, the rate mysteriously rises. With your time and work invested, they are counting on you not jumping to another broker. Sometimes my quotes might sound abit higher, and I never commit to a rate until an application can be written up so the lender will "lock" the rate - that way I am honest with my quotes and I stay out of trouble with my customers. I checked the bankrate site and whereas bankrate is showing a rate of 5.97 for my area, alot of lenders are still quoting as low as 5.7 - which is pretty much impossible, so they are publishing teaser rates.

About a year ago I used a United Airlines/ Wachovia Bank "miles for refinance" program. The interest rate and closing costs I got from Wachovia were very competitive with the rates and terms being offered by several local institutions here, including banks, credit unions, loan brokers, and Savings & Loans. In fact I had just signed a commitment with Wachovia to refinance at a local branch when the same day I received in the mail a notice from United that mentioned their refinance/ mileage deals. I had to have the loan transferred from the local Wachovia office to an office in NC that was handling the program. In the end, by transferring the loan, I got FF miles and a 1/4 percentage point reduction in the interest rate. This was certainly a bonus. I might add that I had checked with Lending Tree first and the rates and conditions quoted by them were not the most competitive. You should really research to find out which financial institutions your airline has programs with. Right now United has programs with Chase, Washington Mutual, Citicorp, and Wachovia, as well as with E Loan, and Lending Tree.

We shopped around enormously when getting a mortgage last year and found that the offers we got through Lending Tree were at significantly higher interest rates/points than we were offered elsewhere, so we ended up not going through Lending Tree for the mortgage.

However, we did use Lending Tree to find a real estate agent and ultimately bought a home using her services and were quite pleased, not only with her services but with the huge number of FF miles we got as a result. In fact, we are both flying in business class to Thailand later this year using those miles (and still have some left over). It took some doing to get the miles credited, and they took quite a while to post, but ultimately we were very happy.

Thank you, wofcol28 and bocastephen, for your informative responses. I will now wait for my reader to tell me about the actual deal he received, which he promises to do after he receives the paperwork.

lmk-
I have read a couple times on Flyer Talk that people have felt that it took too long to receive their miles. Just to clarify, if you submit through the proper site (branded with LendingTree and the airline partner) or call the number provided (service rep will ask for FF # before beginning request), you should automatically receive your miles 6-8 weeks after closing. If have the time I would be interested in your experience because we are always looking for ways to improve our service/program. If you would like to, please send me a private e-mail, but don't feel obligated.

Eric

I am the reader that Gary is talking about. The loan I am applying for is a Home Equity Loan from Chase. The link on Gary's site for loans to receive United Miles was: http://www.united.com/page/article/0,6722,50776,00.html
The bonus for this loan will give me 4250 mile for each 10,000 borrowed. :) When I applied via phone the agent said I can borrow the Maximum which is 500,000 and pay it off the day after the loan funds. The terms and conditions say that I will receive the miles based upon the amount of the initial funding. He then told me I could then apply for another Home Equity Loan for my rental property and pay off the first loan. The July 31, 2004 deadline is for the start of the loan application so I hope to have both loans for a total of
425,000 united miles.

Loan terms: Interest Rate is Prime +1/4 (presently 4.25%), The rate for a loan under $200K is at Prime. No points or fees and the appraisal is a drive by. There is a $75 per year admin. fee but the first year is free. Therefore the only cost will be the interest cost for a few days that I have the loan and since I will pay it off I am not that concerned about the interest rate.
I am waiting for the fed ex loan application that I will sign and send back with my 2 years of tax return, pay stub and insurance info. I will keep you posted as I progress.

That sounds like an awesome deal!

I'm considering doing this as well. Quick question: Did you have a choice of realtors in your area, or were you referred a single agent?

QuiteLion, help me understand this. Why would an agent ever offer to give the buyer a piece of the commission paid (I assume) by the seller? The agent may have said this after the fact, but I can't image such an arrangement in advance.

I cant speak for realtors, but this is exactly how I run things in my shop for mortgages. The travel award I pay is funded directly out of my commission and is simply a cost of doing business. Other brokers spend hundreds on buying leads, but it's more efficient for me to offer the miles/points for the same cost and 1/10th the effort. The realtors I am planning on working with in my program will ultimately be doing the same thing - funding the travel award from their commission share.

If I understand you correctly, you have an award program in place already? I guess my lack of understanding centers around approaching the average real estate agent, who works for a broker -- with a proposal to let them work with me to buy (not sell) a house in exchange for miles/points. I think most of them would be lost as to what to do, and would be reluctant to give a consession once they already have the "lead" (me), but maybe I'm just behind the times. I also have dealt with a fair number of agents over the years, and they all have jealously guarded their commissions and a couple of them got very angry when I suggested compromises to get deals done that would have shaved a bit off their commissions.

I have a program in place now, but I can't discuss it here (TOS). In a nutshell, virtually all realtors outside a network like lendingtree would not have a clue about airline miles. It would be a hard sell to get a realtor unfamiliar with the concept of travel rewards to work with you. I am trying to build a small network of realtors willing to work with me to offer travel awards on their side along with the rewards on my (finance) side - hopefully I will get a few 'yes' answers, but I imagine 98% of the people I talk to will say no, regardless of the chance to increase their business.

It's a shortsighted view on their part. Just like the finance side of things - the brokers in my office think of nothing spending $350 buying phone leads and wasting hours and hours calling leads, leaving messages, competing with other brokers, etc., so they can close one deal for their $350 investment. If I tell them they can offer rewards so customers come to them instead of the other way around and their workload would drop by 75% - but they would have to give up the same $350 to buy the customer some airline miles, they look at me like I am from mars. Same cost, less work, difficult concept to grasp, so the answer is 'no'.

Earning something back for real estate transactions is great, and I wholeheartedly support that approach. I will probably get flamed for this, but do consider that there are alternatives to earning miles. In my case, the cashback options is far better than miles.

For example, if you are a Costco member, then have partnered with LendingTree on both buying/selling a home as well as mortgage services.

On the buying/selling side (Real Estate Agent Services)... If you buy (or sold) a house for $500k, the cashback would be $3,700 (plus $100 if you are an Costco Executive member - see link below). Whereas, if you go through LendingTree using the United Airlines promo listed above, you would earn 3,000 miles for each $10,000 of your home’s value plus a bonus of 10,000 miles during the current promo. So, that $500k house would earn you 160,000 miles.... Since I value miles at $0.015/mile, that equates to $2,400. (even if I valued the miles at $0.02/mile, that would be $3,200).

Summary: I would much rather have $3,700 in cash than 160,000 for buying or selling a $500,000 house.

see: http://www.lendingtree.com/common/bp...9500H000000001

There is also Lendingtree.com and costco deals on home refinancing and mortgages as well. I haven't done the math on these, but my gut says that they too are better deals than earning miles.
see: http://www.costco.com/Service/MemberService.aspx

Agree on your point about exploring cash options. And great tip re: Costco (much better than the Home Depot promotion on the Lending Tree site). But interestingly, for the purchase or sale of a $250k home, the miles are arguably a [slightly] better option. $1,500 cash vs. $1,700 at the standard, non steve100 rate of $.02/mile. Nonetheless, I'd probably take the cash.

I signed up for the United miles at first ($450K sale nets 135K miles - $2700 @ 2 cents/mile). But since I already have 250K UA miles, I felt the Home Depot Gift Card ($2000) would be a better deal. Moving into a new house, I could use the Home Depot GC more than taking a long trip that would eventually drain more money away from working on the house.

I wasn't aware of the Costco deal... hmm, maybe if I joined now I could switch yet again. ;) That would be $3400 in cash....

cash back is a good option....if a customer prefers cash, I can do that - however, I also offer travel gift certificates instead of miles so a savvy customer can get 'cash' credit *and* earn miles.

we have a really neat plan with mortgage points - when a customer meets the conditions of tax deductability for points and wishes to pay them to reduce the rate on a loan (advantageous for loans kept longer than 7 years), we can rebate a large portion of the points back to the customer as their choice of miles, hotel points or travel gift certificates (not cash, to avoid IRS troubles for the customer). This can result in tax-deductable travel.

Loan closed and funded
 

My loan closed on 8/23, funded for $400,000 (170k United Miles) on 8/26 and I just paid it off today. I am now applying for a new loan with Washington Mutual on the same bonus program for a $400,000 equity line of credit for a investment property and should receive another 170,000 miles. My only cost for these two loans will be ~ $350 for interest. :cool: That is cool!

Well, since my original post above in July, I ended buying a house using a real estate agent procurred through the Costco/Lendingtree program. I just got my cashback check today in the mail. I have to tell you, the value of the check far exceeds the value of any miles that I would of gotten (even if I valued the miles at $.02/mile, which I don't. I usually value miles at $.015/mile.)

Note: I did NOT use the financing feature of the Costco/LendingTree program (I only used the Real Estate feature). Why? Well, I was able to find better mortgage rates (read: lower rates/fees) elsewhere. So, earning the cashback or miles would not have been prudent.

I recently refinanced ... got a great rate, then figured I'd try the Amex guaranteed lowest rate. They asked for a fax of the estimate from my way-lower quote, then bettered it. Ended up with a better deal + 1250 points/10,000 financed.

Any great deals out there for a first mortgage to get AA miles? I'm going to check out Citimortgage and Wells Fargo, as they're the two partners listed on aa.com. But they both offer only 1K miles per $10K financed, and would love to find something better if it exists.

I checked out other banks through which I could have gotten DL Skymiles in addition to going through Lending Tree. All of the big guys, like Chase and Washington Mutual, were way higher than the best rate I got on Lending Tree, at least half a point. Things always have a way of changing in the mortgage game, but Lending Tree at least came through for me, and I have 41K more miles to show for my efforts. YMMV w/AA, but in checking around it seemed everyone had variations on the same theme.
Sometimes Lending Tree has bonus deals with airlines on top of the regular mileage awards, as they did with Delta, so it definitely doesn't hurt to hunt around.

murrayhill - If I can be so bold, I too found LendingTree's rates better than the 'Big Guys', but they were still considerably higher than many others. For a really good comparision site, checkout: http://www.bankrate.com/brm/rate/brm_mtgsearch.asp

I ended up closing on a rate that was 1/2% point lower than LendingTree (with identical programs and fee structures).

Good luck!

I used Lending Tree this Fall to sell my boyhood home in Youngstown, Ohio. I was very pleased with the special services above & beyond the call of duty by Jeanette of Century 21. My home sold for $105K so I am scheduled to get 36,750 NW miles + 4K or 6K bonus soon.

Closing was Nov. 16. I got an email from LT on Nov. 22 confirming that they had received my papers OK. They say allow 6--8 weeks, but:

How fast have you all gotten your miles, please? I hope I get mine ASAP so I can book a J ticket on Sky Team to Europe for March 2005.