One of the most important players in the home buying process is the mortgage provider. Without the right mortgage, a homebuyer cannot purchase the home he has found, because the funds will not be available. While many buyers get a mortgage from a conventional bank, there are a number of providers of mortgages Hanover for buyers to consider as they purchase a home.
Mortgage Bankers
Mortgage bankers originate and sell loan products through pools set up in the secondary mortgage market. Investors, including private investors alongside Freddie Mac and Fannie Mae, purchase these loans from the mortgage lender. The lender uses a line of credit to provide the loan, then quickly sells the loan for a profit to the secondary market.
Portfolio Lenders
A portfolio lender originates and funds a loan independently, and may service the loan for its entire life, rather than selling it to a third party. This allows the portfolio lender to offer more flexibility to their customers, because they must not follow the guidelines of the secondary market buyer. For home buyers who have unique needs, need to borrow a large amount or want a non-conventional loan, these lenders often have the right products.
Correspondent Mortgage Lenders
Correspondent mortgage lenders appear to be private originators, as they originate and fund loans using their own names, but then they sell them to a larger mortgage provider. The larger company will service these loans or sell them again. The correspondent mortgage lender has the power to underwrite the loan, but they tend to follow the rules dictated by the larger bank they are partnering with.
Wholesale Lenders
Wholesale lenders are similar to mortgage bankers. Like mortgage bankers, these lenders offer loans then sell them on the secondary market. However, wholesale lenders do not work directly with consumers. Instead, they work with mortgage brokers and loan officers, and those professionals connect with consumers. The wholesale lender funds and originates the loan, then sells it to the secondary market shortly afterward.
Direct Mortgage Lender
Direct mortgage lenders may be portfolio lenders or mortgage bankers. This category simply means that the lender works directly with the consumer, rather than through a broker or other middleman.
Each of these mortgage providers offers pros and cons that the home buyer must consider. In the end, the mortgage product itself, rather than the lender, may be the deciding factor in choosing a lender.
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