A bank or mortgage company offering home loans may be referred to as a 'lender'. There are eight different categories of primary mortgage lenders.
These are correspondent lenders, mortgage brokers, wholesale lenders, direct loans, portfolio lenders, mortgage bankers, mortgage lenders online, and sub-prime mortgage loans.
Here, the first three categories are described in detail.
or correspondent lender:
An institution or organization that can authorize loans on behalf of a mortgage lender is known as a "correspondent lender.
In other words, correspondent lenders acting as agents or sponsors of various financial institutions in the origin and closing loans. They are the ones who underwrite the loan.
We also service the loans from lenders.
No group of mortgages for resale. In contrast, sold separately. This is how they differ from other mortgage brokers and lenders.
or mortgage broker:
An individual or organization providing financing to borrowers through lenders portfolio, mortgage bankers or any other is called a "mortgage broker.
A mortgage broker, therefore, acts as an intermediary between lenders and borrowers.
These agents help the borrowers to choose the right loan program, filling out loan applications, and find a lender who can fund the loan. They also help get the credit report, appraisal, etc.
or wholesale lender:
Any institution that finances and insures mortgage loans known as a "wholesale lender". It also services the loan.
However, a wholesale lender does not deal with borrowers directly to the final retail market. Instead, it is a third party such as a mortgage broker.
A wholesale lender that holds some or all of their mortgage is known as a "portfolio lender." On the other hand, the wholesale lender sells its mortgage is a "mortgage banker.
Other categories of primary mortgage lenders are described in detail in other articles.
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