They say the mortgage industry is full of “puzzles and riddles” that are confusing to navigate. That is quite understandable. After all, the industry is full of jargon that those new may find intimidating.
In this post, we share the different types of mortgage lenders, Corpus Christi, TX. The goal is to provide insights into the mortgage world so that if you apply for a loan, you are more prepared and increase your chances of getting the best deal available.
Contrary to what many people believe, different types of mortgage lenders dealing with home loans and refinancing. Every borrower should understand the differences so that it is a lot easier to determine whom you should work with for your application.
Wholesale lenders – are banks (or other entities) that do not deal directly with clients but offer their loans through third parties, including mortgage brokers, credit unions, other banks, etc. However, wholesale lenders, especially the biggest ones, also have retail operations that work with consumers directly.
Portfolio lenders – are lenders who use their own money when making home loans, which they usually maintain on their books. They do not have to meet the demands of outside investors. Thus, they can define their terms for the loans they issue. “Niche” borrowers who do not fit the typical lender profile prefer portfolio lenders.
Warehouse lenders – They have some similarities with wholesale lenders. But unlike the latter, they lend money to banks or other mortgage lenders with which to issue their loans instead of providing loans through intermediaries. They get repaid when the mortgage lender sells the loan to investors.
Direct lenders – are lenders that originate their loans – either with their funds or borrowed funds. They can be retail lenders because they do not involve third parties in providing loans to clients.
Correspondent lenders – work with investors (also known as sponsors) who purchase any mortgages they make that meet their criteria. Fannie Mae and Freddie Mac are the perfect examples for this.