Home Mortgage Lenders Or Brokers
Home mortgage lenders or brokers assist borrowers in finding, processing and implementing a loan. In return for their service (both in finding the best loan rate & terms, as well as processing the paperwork in a timely and legal manner), home mortgage lenders or brokers typically make 1-3 percentage points on the loan amount.
Who Qualifies as a Mortgage Lender?
There are three main groups that come under the umbrella of home mortgage lenders -- a loan officer, a mortgage broker and a bank or lending institution. While each of these lenders effectively does the same thing, there are some important differences between them.
LOs are employees of a bank or other lending institution. They sell the specific loan programs of their particular bank. Loan officers work directly with borrowers to process and implement their application and match them up with one of the loan programs that their lending institution offers. When the borrower is approved for a loan, the LO begins to process the home mortgage transaction. While loan officers are very convenient for borrowers, they are limited in what they can offer to a borrower and may not always be able to offer the best mortgage rate to the borrower.
Mortgage brokers differ from loan officers in that they work with many lenders and can offer numerous programs to a borrower. Mortgage brokers are best thought of as a freelance agent who goes out and finds the best loan for their clients. A broker will also analyze the credit situation of a borrower in order to find the most competitive loan rate. For borrowers who have a credit score between 619 and 520, you will have to use a subprime mortgage lender. In return for finding and implementing the loan for the borrower, a mortgage broker typically receives 1-2% of the financed amount.
Banks & Lending Institutions
Probably the most common approach by borrowers is to find a loan by walking into their local bank. The advantage of using a local bank is that they understand the local market and are fairly streamlined in their process of pushing through and closing a loan.
On the downside, banks don’t always offer the lowest mortgage rates, especially for borrowers who lack the 20% equity to put down on a home purchase or for anyone who has a credit score below 720. It is often the case that a broker will find a better interest rate with a smaller lending institution and, within a couple of months, the loan will be owned by a large banking institution.
California Bad Credit Mortgage Lenders
For borrowers looking for a Los Angles, Orange County or San Diego mortgage lender, there are mortgage lender networks that provide comprehensive broker lists. who have a poor credit history or a bad FICO score, they will need to get a bad credit mortgage loan. These types of loans will carry a higher interest rate and will often have less favorable loan terms. However, with hard work and diligence paying of their loan, a borrower can raise their credit score and find a better loan rate when they decide to refinance their loan.
Mortgage Lenders Online
There are numerous direct mortgage lenders online. In some cases, mortgage lenders offer second loan programs, as well as commercial mortgage lender programs. To find out the sepcific programs offered by wholesale mortgage lenders, you will to need to contact them directly.