The mortgage lender is the institution that provides you with a loan to purchase a home or extend or renovate the house.
The mortgage lender sets the terms and conditions of a lender, creditworthiness criteria, interest rate, and repayment schedule.
The market is crowded with many types of mortgage lenders, and you may get confused while searching for a suitable lender with whom you can confidently share the information of your assets and sources of income. Choosing the right lender according to your need may help you save time, cost and avoid conflicts.
When you search for home buying online, probably, you notice ads related to mortgage lenders, mortgage brokers, wholesale lenders, retail lenders, etc. There are three main types of lenders institutions where you can get a loan. These three types of lenders have more categories, which we will discuss later. First, lets’ discuss the three main types of mortgage lenders__ retail banks, credit unions, and mortgage banks.
The retail bank could be a big bank like Bank of America or a small local bank. They set their terms and approve and close a loan for consumers. Small retail banks are most flexible and offer loans at lower interest rates because they keep the loans in their books or sell them to investment firms like Fannie Mae and Freddie Mac__ who then package the loans into mortgage bonds. When you get a loan from retail banks, they appoint an officer who writes your loan and earns commission or bonus.