Choosing a Lender - Makes a Difference!!!

Considering the concern of higher interest rates, wouldn't it be wise to explore your options with a Mortgage Broker?

Types of Mortgage Lenders

Banks: These are traditional lenders that offer a variety of financial products, including mortgages. They typically have strict lending criteria and require extensive documentation.

Mortgage Brokers: These are intermediaries who connect borrowers with lenders. They typically have access to multiple lenders and can help borrowers find the best mortgage rates and terms.  There is variance among brokers based on their pricing structure with their wholesale or correspondent lending partnerships.

Mortgage Bankers:   This is a company or institution that originates and funds mortgages using their own capital or funds from a warehouse line of credit. They underwrite and approve loans based on their own guidelines and then sell the mortgages to investors on the secondary market. Mortgage bankers typically offer a limited number of loan products and their rates and fees are usually set.  They may offer more control over the entire process due to delegated underwriting and closing abilities.

Credit Unions: These are not-for-profit financial cooperatives that offer mortgages and other financial services to their members. They are not held to the same regulatory requirements as traditional lenders. They may offer advantageous products to members such as first-time homebuyer programs.   They may also have flexibility with guidelines based on internal decision-making.

Private Lenders: These are individuals or companies that lend money directly to borrowers. They often have more flexible lending criteria but may charge higher interest rates and fees.

Correspondent vs Wholesale Lenders:  

A correspondent lender originates and funds mortgages in its own name. It then sells those mortgages to larger lenders or investors on the secondary market. Correspondent lenders underwrite and approve loans based on their own guidelines. They typically have to meet the criteria of the larger lenders or investors who will ultimately purchase the loans.  

A wholesale lender, on the other hand, is a type of lender that provides funding for mortgages through a network of brokers. Wholesale lenders do not work directly with borrowers. They instead offer loans to mortgage brokers at a discounted rate.