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Home Mortgage Lender Types
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Know Your Mortgage Option Sources
There are a number of types of primary mortgage lenders that you may encounter when shopping for your mortgage loan. Mortgage Bankers typically originate loans and then sell these loans to the secondary mortgage market shortly after funding. (The mortgage banker may or may not sell the servicing of the loan.) Often mortgage bankers have attractive loan programs and rates.
Direct Lenders
Direct Lenders fund their own home loans. These lenders are usually mortgage bankers or portfolio lenders.
Portfolio Lenders
Portfolio Lenders make loans with the institution's own funds, keeping the loan on the institutions books rather than immediately selling it to the secondary mortgage market. Many institutions engage in mortgage banking as well as portfolio lending.
Since portfolio lenders fund the loans, they are not confined to Freddie Mac/Fannie Mae guidelines. After a portfolio loan has reached its one year anniversary date without any late payments, it is considered seasoned and may be sold to the secondary mortgage market even if it does not meet Freddie Mac/Fannie Mae guidelines.
If a portfolio loan is sold to the secondary mortgage market, the portfolio lender may continue to service the loan.
Mortgage Brokers
Mortgage Brokers work as intermediaries between lenders and borrowers. Mortgage brokers have access to a number of lenders and often offer the most variety in loan programs. Brokers assist the borrower in filling out the loan application, obtaining the credit report and appraisal, selecting a loan program and finding a lender to fund the loan. In general, brokers do not make the decision to extend the loan and do not fund the loan.
The mortgage broker may be paid by the borrower or the lender. Payment to the broker is typically included in the closing costs as either fees or points.
Wholesale Lenders underwrite and fund mortgage loans. Wholesale lenders may also service the loan payments and ensure the loans compliance with underwriting guidelines.
Correspondents
Correspondents act on behalf of one or several lenders (sponsors) throughout the origination and closing. The loan is usually underwritten by the sponsor. The correspondent acts as the lenders agent. The correspondent may also service the loan for the lender.
Wholesale Lenders
Wholesale Lenders underwrite and fund mortgage loans. Wholesale lenders may also service the loan payments and ensure the loans compliance with underwriting guidelines.
Banks, Credit Unions and Savings & Loans
Banks, Credit Unions and Savings & Loans use funds gathered from their customers through checking, savings and certificates of deposit to make mortgage loans. The institution may hold the loan in its portfolio or sell it to a secondary mortgage market.
Secondary Mortgage Market
When you apply for a home mortgage, you may be under the impression that the mortgage lender will be servicing the loan until it is paid off. This may not be the case. It is common practice for the mortgage loan to be bought and sold to a secondary mortgage market investor, sometimes more than once in the life of a loan.
These transactions will not affect your mortgage amount or your mortgage payment. The secondary mortgage market is comprised of investors like Fannie Mae and Freddie Mac. Selling loans to the secondary mortgage market provides primary lenders with funds needed to issue new mortgage loans.
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The custom-built home of your dreams is more affordable than you may imagine. Don't miss the opportunity to have a dream home that is truly your dream! The Collins Development homebuilding team wants their homes, by virtue of design, construction, and location, to contribute to your quality of life. What better way to do this than to help you build a house designed to fit your life, in one of the most desirable counties to live in California.
Collins Development Co offers a complete range of custom home services: lot selection, home financing, house design, interior design, landscaping design, engineering, permitting, and construction management
Contact us today and let's talk about how to get started.
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French Country Home
Sold for $599,900
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Lot 189 - The Knolls
1364 Knolls Drive - 2,842 sf - This European country home provides multiple views of a habitat pond, and the sur-rounding Sierra Nevada foot-hills and mountains. De-signed with entertainment in mind, the gourmet kitchen features restaurant-quality appliances, pantry, and spacious formal dining room for special occasions. Enjoy outdoor gatherings year-round on the spacious deck.
Full home detail
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