Today’s subject is about the three different types of mortgage lenders that are out there, you have your bank, you got your mortgage lenders and you got your mortgage brokers and so they’re different and they offer different programs and they have different policies and stuff like that. This is important because not all lenders have all the loan programs out there, so you’re going to find that the loan program you’re looking for might not be available at the lender you are looking at all.
This is where it all started all right. So everybody knows what a bank is: they’re depository institution. They do commercial lending generally. And we’re going to kind of group credit unions in here as well.
You have what’s called a mortgage lender or a correspondent lender, so they actually do the funding of these loans in their own name, there’s a multitude of these out there and you think everything is basically done in-house. They have their own underwriting and funding on everything, but they are not a bank. So you can’t have a checking account or a savings account there because they are not a depository institution. The only thing that they do is mortgages.
The third type of outfit is a mortgage broker. So a mortgage broker does not lend their own money. What they do is they deal with different banks or correspondent lenders, and the different banks reach out to them and say: okay, we have this mortgage product, we have this mortgage program, we have these interest rates, we have these fees and the mortgage broker typically will look and see what the best you know: banks are aligned with them and then, when you go into them they will look at the various options and see what kind of place you would be best suited.
We are not here to say one is better than the other because there are great banks, great mortgage correspondent lenders and there are great mortgage brokers, but there are also pretty bad banks, mortgage correspondent lenders and mortgage brokers. So it’s kind of up to you to figure out what is going to be best for you. I don’t want to say one is better than the other, but if you go to one and they say this is your only option, it may be your only option at that one particular institution, you should make sure you check around to make sure that you’re getting the best.
What programs are being offered?
Make sure that you understand what programs are being offered types of there and make sure you look into the mortgage programs that particular institution does not necessarily provide as well to really get the best loan program that’s suited for you. So don’t be afraid to shop around when it comes to mortgages that you want. Also, make sure that you’re dealing with someone who is knowledgeable because really, ultimately it comes down to the loan originator in most cases as to whether or not they’re going to structure along properly and push you to the best mortgage possible.
I’m just going to throw one thing in here, and this is my personal opinion. Basically, use a local lender no matter which type of institution you go with use a local lender, it’s just easier all around. If there’s someone to even go see not going to have to nail it across country internet type options. I have seen many of those situations just go sour and you can’t get a hold of anybody.