In today’s article, we will be discussing mortgage lenders, 5 Qualities Of A Good Mortgage Lender, types of mortgage lenders, and lots more but first, for those that don’t know what a mortgage is, I will be explaining what a mortgage is before moving to the key point of this article.
What Is A Mortgage?
A mortgage can be defined as a type of loan that can be used to buy or maintain land, a house, or any type of housing, whereby the person that borrowed the money(borrower) will be given a specific period of time to pay the money with an interest rate, collateral will be involved in this type of loan.
Who/What Is A Mortgage Lender?
A mortgage lender can be a company or bank that gives out loans to people, these loans are used to purchase or maintain a land or house. They also offer personal offers, auto loans, and student loans but with all these loans they have an interest rate which they add to the amount given out as a loan and it will be paid at a given period of time.
It is best for you to compare different lenders’ loan terms, interest rates, and the period of time given for the payment so you can know which one offers the best package.
Types Of Mortgage Lenders
We have various types of mortgage lenders which include:
1. Retail Lenders
Retail lenders are mortgage companies or banks that work directly with their customers, they also offer home loans to people. Retail lender includes credit unions, banks, and mortgage bankers.
2. Wholesale Lenders
Wholesale lenders do not work directly with their consumers, they are other financial institutions or banks that make the loan offer through third parties like credit unions, banks, and mortgage brokers. The wholesale lenders set the terms for your personal loans which is why the wholesale lenders’ names will appear on your loan documents. Most mortgage deal with both the wholesale and the retail divisions.
3. Direct Lenders
Direct lenders are companies that use their own money for loans to their consumers or they borrow money from somewhere else to satisfy their consumers. They have very flexible and simple qualified guidelines for borrowers with complex loans. Direct lenders usually have limited locations and operate online.
4. Mortgage Bankers
Mortgage bankers are most mortgage lenders in the U.S., they borrow money from the government at a short-term rate to fund the mortgage of their consumers. They also have a flexible policy to give borrowers home/personal loans.
5. Portfolio Lenders
Portfolio lenders do not sell their debt to the secondary market like Freddie mac or Fannie Mae instead they are keeping the loan in their portfolio, and they usually decide who can be qualified for the mortgage. These lenders can be the best choice if one needs a larger amount of money and also can meet up with their requirements and term with what has been stated by their leader.
6. Hard Money Lenders
Hard money can be a very good option for a real estate investor who is ready to borrow money to purchase a house, furnish it, and re-sell it, then the investor will be able to pay the loan back because hard money lenders do not give a long period of time for consumers to return the loan.
Their origination fees and interest rate is high and they can be flexible but they can close their loans deal quickly.
5 Qualities Of A Good Mortgage Lender
Scammers are everywhere but they are also good mortgage lenders, how can we know a good mortgage lender? A good mortgage lender will have this type of character toward their client which includes:
- A good mortgage lender will make sure that their client understands the whole mortgage process detail, they will explain how mortgage works, and the requirements and will tell you if you are eligible to obtain the loan you want or not, they will also tell you the specific document you need to provide for you to qualify for the loan.
- A good mortgage lender give local support, it is advisable for you to check the lender’s history before doing business with them, the best mortgage lender is the one with a lot of experience because the more the lender is experienced the more the lender is capable.
- A good mortgage lender is an honest person that gives clients direct answers to their questioning and the rating is not too high, that is why one needs to compare lenders and their interest rates and other fees to know the best one
- Good mortgages had a track proven record of success that can be easily traced to know if they are good or bad, to know a good lender you can ask around about them to know their previous deals from there one can decide on what to do.
- A good mortgage lender will not put any form of pressure on their clients to make their choice instead they will help you make the right choice by giving you the terms and requirements of each loan.
In conclusion, we have been told how to know a good mortgage lender and what a mortgage lender is, we have also talked about the types of lenders we have in case you are looking for a loan to purchase a land or house you have to visit any mortgage lender nearer to you.
Kindly drop your question or comment in the comment section I will be glad to attend to them all, thank you for reading.