Learn What the Main Types of Mortgage Lenders Are

Credit Unions-

 

The not-for-profit tax status of credit unions makes them convenient because they offer more personal service and lower fees and pass on the saving to its member. If you don’t have a perfect credit score, you can still get a loan from credit unions. They are usually an office-based setup with few branches and ATMs. A loan officer handles all your financial transactions when you get a loan from credit unions. 

Mortgage Banks

You will find that in the USA, mostly the mortgage lenders are mortgage banks. It can be an individual, a company, or an institute that creates a mortgage loan. They may use their funds or borrow from warehouse lenders at short-term rates to secure the mortgage.

How to differentiate between different kinds of mortgage lenders?

 

The three main types of lenders are further divided into different categories of lenders. It is intimidating to distinguish between them without proper knowledge. However, knowing the different types of lenders and their roles may help you get the best loan product with favorable terms and lower interest rates. 

Mortgage Brokers

Mortgage brokers do not provide loans but a middle-licensed professional between you and the lender. Broker collect application and counsel you on application items to improve your loan approval chance. 

A mortgage broker may be a company that connects you multiple lenders retail or mortgage banks or wholesale lenders and help to find best terms and rate. 

Brokers help save your time and effort by finding the best possible deal and negotiating to get you a discounted interest rate based on your financial and personal information.

Mortgage brokers charge a fee to lenders of 1% of the loan amount when the loan closes. Otherwise, a borrower pays commission to the broker at the closure of the loan.