Know the Different Types of Lenders
Your most important criteria in choosing a Mortgage Professional should always be Competence and Trustworthiness. But, you should also consider what type of lender they are. It won’t be obvious which of the three types your prospective lender is, so feel free to ask them. Each lender may have access to different loan programs depending on your situation.
All lenders charge you for doing the loan. If they don’t charge you in closing costs, they make it up by charging a slightly higher interest rate.
Mortgage Bankers handle the whole loan process “in house” and close the loan with their own company’s name and funds. Your local bank or credit union are examples of this and are convenient because you already bank there. They may have competitive rates if you have excellent credit & job history, but may not have a variety of loan programs to choose from.
Many lenders sell your loan after it closes. Your terms won’t change, but the company you write out your check to will.
Mortgage Brokers take your loan application and shop around to various mortgage banks (many of which you’ve never heard of but are solid lending sources) to find the right loan program for your individual situation. Obviously, having choices of programs is good.
Correspondent Lenders are a sort of hybrid between the other types. They can lend money that they have access to “in house” but can also broker through other lenders as well.
Mortgage Brokers & Correspondent Lenders have access to “Wholesale Lenders” that do not lend directly to the general public.
Whichever you choose, it is smart to ask if your mortgage professional what kind of relationship they have with the loan processor and the underwriter that they will be using for your loan. Do they work with these people regularly? Can they call in a favor to have your file moved along more quickly? Are the loan processor and underwriter local and can you speak to them when you need to? The loan processor and underwriter have an enormous amount of ability to make the process go smoothly or be a nightmare of problems and delays.
Thinking of buying a home in the Portland, Oregon area? Checkout our First Time Home Buying Classes!What Type of Lender Should I Use?,
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