With the growing number of mortgage lenders, analyzing and choosing the best one can really be a daunting process. So, take time to find the best lender, for the type of loan you want, as it this is extremely important. If you know the difference between the types of mortgage lenders then it will easy to match it with your exact need.
There are many types of lenders and some types coexist, i.e., many lenders are involved in more than one type of lending. Let’s see in detail.
- Mortgage Lender Seattle can be an individual or bank who can offer you the loan amount. They check your creditworthiness and ability to repay the loan.
- Mortgage broker plays a mediator role between you and the bank on commission basis. They are professionals who collect application and documents from you and give advice on every aspect to improve your credit limit.
Usually, brokers are paid by the loan providers. Sometimes the borrower also gives him a fee. If you don’t want the trouble of contacting various banks for loan then you must go to mortgage bankers.
- Direct lenders simply mean those who provide loan by either using their own money. Since there are no middlemen, they directly deal with customers like a retail lender.
- Retail lenders provide loan directly to the customers, for example, bank, savings institutions, credit unions. They may also act as agents for a large financial institution. Since they work for many lenders, they can provide you with the best terms and fees.
- Wholesale lenders sanction the loan only through third parties like banks, credit union etc., usually these large banking companies will have their retail unit to work as agent. The loan sanctioned will be in their name since they are the one who provide.
- Warehouse lenders don’t deal with customers directly, but lend money to banks and other mortgage bankers by short term funding for collateral security. Banks are able to fund without using their own capital.
- Portfolio lenders use their own money that they keep in portfolio for consistent interest. The lending rates may be higher with these types of lenders. They have their own terms and conditions. Mostly people who have poor credit score, or have gone bankrupt opt for this.
- The last go for anyone who doesn’t fit in other types of lenders is, hard money lenders. They are individuals with money to lend. Interest rates tend to be higher here. Hard money lenders are usually used for short term loans.
- Correspondent lenders underwrite home loan in their own name. however, when the loan closes, they immediately sell these loans to larger loan providers. Borrowers through correspondent lenders will get bills from the larger banks.
Finding the best money lender can be intimidating. Visit different lenders’ website and do some research, compare the rates, fees and lending process.
If you are still confused about lenders, here is the best solution. You can visit Sammamish Mortgage, a very responsive, transparent lending company. Their professionals help you choose the best plan. They provide great rates at less fee. Make your home loan process an exciting experience.