Wholesale Lenders
Wholesale lenders do not interact with consumers directly. Instead, they originate loans through a third party __ that may be a broker company, credit union, or retail bank. The bank or any other financial institution that works as a wholesale lender sets the term of loan approval. That’s why its name appears on the document. For example, mortgage banks operate as wholesale lenders or retail lenders. The wholesale lender sells the loan to investment companies.
Retail Lenders
These institutions act as a third party (primarily local bank) between you and wholesale lenders. And they also originate loans directly to the consumer. They deliver funding on the retail level with retail rates.
Portfolio Lenders
If you’re a “niche” borrower, a portfolio lender is a perfect choice for you. Portfolio lenders don’t have to satisfy the demands of outside investors and use their own money when making home loans, which they maintain on their books. However, if you want to get a jumbo loan, you must seek out for portfolio lender. Their rates are typically meager.
Direct Lenders
Direct lenders can be banks, mortgage banks, or portfolio lenders and initiate their loans through their funds or borrowed funds. They are called direct lenders because no third party is involved in mortgages.
Correspondent lender
A correspondent lender is an exclusive lender that originates, guarantees, and funds a mortgage loan using its name. The correspondent lender will then sell the loan to a more extensive mortgage lender, usually Fannie Mae and Freddie Mac, who becomes the loan contract. Finally, the loan servicer will be the institute in charge of collecting the monthly payments.
Hard money Lender
If you do not qualify for any other type of lender, then you can seek a hard money lender. These are private companies with large reserves. These loans need to repay quickly within a few years and usually have higher interest rates, 10% to 20%, and down payments.
Always complete your research before applying for a loan, and compare the terms and rates of different lenders, then figure out that you are in a position to repay the loan based on your credit and financial status. There is no need to survey door to door for lenders. You can compare different lenders online on other websites. Many lenders have their online apps. You can complete your research about loan products, published rates, terms, and lending process efficiently.