Different Types of Lenders

There are three main sources of mortgage lenders: banks, savings and loan associations (S&Ls), and mortgage brokers. In the past, lenders were almost exclusively banks or S&Ls. Today, many different types of lenders have jumped into the field of mortgage lending. See the details below about the three main types of lenders: banks, S&Ls, and mortgage brokers.

1. Banks
Depending on your bank of choice, bank loan officers can offer you different kinds of loan packages. Some banks may have 1 or 2 fixed-rate mortgages (FRMs) and a couple adjustible-rate mortgages (ARMs). Other banks may offer a wide variety of FRMs and ARMs, in addition to VA and FHA loans. If you have done business with a particular bank for a number of years and have a good relationship with that bank, you may want to check their rates and fees first. However, be sure to check at least 2 different places to compare rates.
**NOTE: A mortgage broker can check hundreds of lenders and will be able to tell you which ones have the best rates and can help you compare the various lenders.

2. Savings and Loans Associations
Savings and loans associations focus on one- to four-family residential mortgages, multifamily mortgages and commercial mortgages. These institutions are growing in popularity and are becoming more similar to conventional banks. Be sure to compare rates before selecting a savings and loan association.

3. Mortgage Brokers
A mortgage broker's duty is to relieve most of the stress of applying for a mortgage. Mortgage brokers find the loan best-suited for the customer's individual situation from a number of different sources. Because mortgage brokers deal with a variety of lenders, they are usually able to pull together a larger variety of loan choices. The broker can save the borrower time and money by pulling everything together in the loan application and presenting it in the best possible package to the lender, thereby increasing the likelihood that the lender will approve the loan.
Brokers can easily and quickly put their customer's application in front of several different lenders. Brokers are experts at making the mortgage application process as quick and painless as possible. Brokers currently originate more than half of all mortgage loans in the U.S., and are particularly adept at subprime loans, FHA loans and VA loans. Some brokers require upfront fees for their services, but many earn their commissions on yield spread, and charge NO upfront fees to the borrower.

Advantages of using a Mortgage Broker instead of a local bank

• Offer a larger variety of mortgage options
• Normally offer the most competitive rates nationwide
• Mortgage brokers only deal with mortgage loans, so the are highly specialized
• Highly motivated to get their customers' loans approved

Please contact me so that I may find which lender has the best current rates and which one specializes in the type of loan you are looking for. I can help custom fit your loan, by matching you with a lender according to your specific needs. After looking at whether you have a high or low FICO score, steady or unsteady employment history, and many other factors, we can choose the right lender for you.