Mortgage Lenders
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There are basically three different types of lenders that originate mortgage loans. They are a Broker, a Retail Bank, or a Correspondent Banker/Broker.
Mortgage Brokers
A Mortgage Broker arranges loans through a third party, usually a wholesale lender. Since Mortgage Brokers have no money to lend and don’t make lending decisions, they have a lack of control of the process of approving and closing a loan. They really only prepare an application package and submit it to a number of lenders for approval. Mortgage Brokers have a defined number of wholesalers to submit loans to, which provides the borrower more options. However, the wholesalers that Mortgage Broker submit these loans to, know that they have no control in the processing or business channel. Therefore, it’s extremely difficult, if not impossible to deliver a reliable closing for their customers. This middle-man approach can cause many problems when purchasing a home, primarily because of the deadlines that must be met. If a loan isn’t processed and funded quickly, the borrower may breach their sales contract and lose the home they’re attempting to purchase.
Retail Banks
A Retail Bank controls the process and has the money to lend the applicant. However, Retail Banks are limited to the number of products or options they can offer the borrower, and the rate and costs are usually less competitive because they don’t shop the banks. They may offer in-house incentives, but they are rarely competitive by industry standards. They also typically use a centralized underwriting, processing, and closing department, which gives your Loan Officer very little control of the process or outcome.
Correspondent Banker/Broker
A Correspondent Banker Broker employs their own underwriters, maintaining control over your loan approval process and outcome. They typically can deliver a full loan approval must faster than a Bank, and certainly faster than a Mortgage Broker. This type of combination Banker and Broker provides the best of both worlds, without the hassles of either. It provides the most flexibility, the lowest rates and fees, and delivers a predictable outcome the client.
In the Banker role, a Correspondent Banker Broker controls the delivery of the final loan documents and the delivery of your money to the closing table. They control the entire process, from application and approval through the use of their own money to close your loan.
In the Broker role, a Correspondent Banker Broker maintains the ability to choose which Bank will ultimately service your loan, allowing them to select the Bank that is most competitively priced the day you lock in your rate, without jeopardizing your approval.
Find out how you can work with a Correspondent Banker Broker, and have the peace of mind that your loan will always close On Time, Under Budget, with No Surprises!
