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A mortgage lender is a company, institution or organization who loans money to individuals for the purchase of real estate. Lenders typically include credit unions, banks, trust companies, life insurance companies or private firms who lend the money for land, houses or other peices of real estate.
With literally thousands of mortgage lenders in the United States, you have plenty of variety to choose from. Some lenders are very small, like local banks, and focus on lending money for real estate in a small geographic area. Larger lenders provide mortgage loans through an entire state or region; some even make loans nation wide.
Mortgage lenders may also be affiliated with state or federal agencies that provide funds or guarantee real estate loans such as HUD and Freddy Mac.
For the prospective buyer, it really doesn't matter whether you secure a loan through a mortgage lender, mortgage company or a mortgage broker; the goal is to attain the best possible interest rate and lowest fees.
Mortgage Lenders or Brokers
Mortgage brokers are in business to arrange transactions, they never lend money directly. In other words, they take your loan application and find you a lender. Broker's have access to numerous lenders which may offer you a wider selection of loan opportunities. Broker's are obligated to find the best deal for you unless they have a contract with you allowing them to act as your agent. It isn't a bad idea to contact more than one broker, just as you should with banks and other lending institutions. The bottom line is for you to make yourself the best deal.
Mortgage Lenders and Brokers
Actually, in many cases, whether you are working with a lender or broker may not always be clear because some financial institutions operate as both lenders and brokers. It is important for you to ask because a broker is usually paid in the form of "points." One point is equal to 1 percent of the loan amount. If you are paying points to acquire a home, these fees can add up. Let's say your loan is $300,000. That means you pay $3,000 (one percent) out of your pocket to get the loan.
Once a lender makes you an offer, remember it isn't cast in stone, so continue to negotiate. You never know, but on any given day, loan brokers and lenders may offer two different deals to people with the same qualifications. The reason is that they are probably allowed to keep some of the difference as compensation for generating the loan. These situations can occur in both fixed and adjustable-rate loans.
A good tip is to have the lender or broker write down all the costs (called garbage fees by lenders) associated with the loan. Then simply ask the lender to waive or reduce some of the fees or give you a lower interest rate or fewer points. Remember, it never hurts to ask.
Finding the right mortgage company
How do you get started with the process? Simply, fill out our short form and you will get competitive quotes from up to four lenders or brokers so that you can compare their offers. PickYourLenders.com has helped hundreds of thousands of people by matching quality lenders with your specific needs.
Don't forget, shop around, compare offers and negotiate from there.
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