Finding a Mortgage: Lender Types
Local Banking Institution: “Retail”
You can walk into your local bank/credit union and inquire about a mortgage loan. This is referred to as a “retail” bank, which means the interest rate that you can obtain will probably be slightly higher than you could get via other avenues. This route may also leave with a few questions as the bank employees are probably not as well versed with different loan programs. It may also be a surprise to you that most bank employees are not required to be licensed or required to satisfy any kind of loan education.
Mortgage Broker: “Wholesale”
Mortgage brokers are able to “shop” for you. They have the ability to seek out the different options for you and have the ability to try and seek out the lowest possible rate offered by numerous investors. This type of mortgage professional has probably come under the most fire in recent years because prior to recent history there was no licensing requirements for them. This is a viable option but you should also proceed with the most caution as many mortgage brokers are located out of state and may not be familiar with your local area.
Mortgage Bankers: “Correspondent”
This option is a combination of both above mentioned avenues and probably the best balance between them. Mortgage bankers really have the best of both worlds and offer the most consumer protection available. They couple the competitive interest rate market due to their ability to entertain offers from numerous investors but provide the consumer with the most transparency because of the licensing requirements of brokers and the education that bank employees most likely lack. This again is probably your most comprehensive choice when deciding we who to consult when obtaining your mortgage.
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