Where to find the best loan companies
All loan officers will tell you that their company is the best, and they will give you a list of reasons why. But if you see the same loan officer years later, he probably works for a different type of lender and will tell you that the new lender he works for is much better, giving you a new list of reasons why.
People used to go to portfolio lenders because they were good at getting deals done. Mortgage bankers and brokers, on the other hand, have become more important over time, and agents have followed this trend. Most of the time, a realtor will point you in the direction of a loan officer with a good reputation for service and dependability. However, sometimes a realtor will suggest a loan officer who works for a lender with which the realtor has a relationship.
Sometimes a good loan officer is more important than a good loan company. A loan officer has two very important jobs. The first is to help you get the loan approved. The second is to handle all the negotiations on your behalf. Their second job is to get good loans to people, so you need a reliable and honest agent.
When it comes to lending institutions, each type has its own pros and cons. The quality is different in each branch office, depending on the loan officer, the support staff, and other things.
There are several kinds of mortgage lenders.
- Mortgage Bankers
A mortgage banker is a lender with enough assets to make individual loans as well as groups of loans that they sell to loan investors. A mortgage banker is any company that does this, no matter how big or small it is. Not all of them take care of the loans they give out, but some do.
- Mortgage Brokers
Mortgage brokers are businesses that make loans in order to sell them to other lending institutions. The broker makes connections with different companies. There are a lot of mortgage brokers who also work as correspondents, which means they can also be mortgage bankers. Mortgage brokers also work with banks and credit unions that have departments for making wholesale loans.
- Wholesale Lenders
Portfolio lenders and mortgage bankers work as wholesale lenders and give loans to mortgage brokers. Some wholesale lenders don't even have their own retail branches. Instead, they mostly get their loans from mortgage brokers.
- Portfolio Lenders
A portfolio lender is an institution that lends its own money and makes loans for itself. They are giving out loans for their own loan portfolio and aren't worried about selling them right away. Most of the time, big banks or savings and loans are the ones who lend to portfolios.
- Direct Lenders
Direct lenders pay for their own loans, and they can be big or small. Large banks, savings and loans, and smaller institutions all have "warehouse" lines of credit that they can use to get money to pay for the loans they give out. Most direct lenders are portfolio lenders or mortgage bankers, but this isn't always the case.
Most of the time, banks and savings and loans use warehouse lines of credit instead of deposits to pay for loans. Warehouse lines of credit are also used by smaller institutions to pay for loans. Most direct lenders are mortgage bankers or portfolio lenders, but this isn't always the case.
- Correspondents
A "correspondent" is a company that makes home loans in its own name and then sells each loan to a "sponsor," which is a larger lender. The sponsor acts as a mortgage banker and sells the loan to someone else.
- Bank and Savings & Loans
Most of the time, both savings and loans and banks act as mortgage bankers or portfolio lenders.
Credit unions are places where people can get loans from each other.
Most credit unions are correspondent lenders, but if they were big enough, they could also be portfolio lenders or mortgage bankers.
