A big question that many home buyers are facing today is which loan program they should go with, and who do they choose to be their Loan Officer. Big Bank? Broker? Or Direct Lender?
People often confuse the lender types, however it is important to understand the difference between the three types of lenders, so you know what to expect from them before, during and after the application process. The three types of Loan Officers we will be discussing are: A Big Bank, A Mortgage Broker, and A Direct Lender.
The first thing you think of when you’re looking at a home you love is making an offer!! But in today’s market, with the housing prices being so low, and interest rates where they are now, the only way to make a strong offer is to get pre-approved first! Choosing who you get pre-approved with for your Loan is important!
A Big Bank Loan Officer is usually an unlicensed representative of a lending institution, the bank, who works to sell and process mortgages and other loans originated by their employer. They usually are limited in what they can offer to only their own products, severely limiting your loan rate, cost, and product options. These Loan Officers represent the borrower to just their lending institution and will guide them through the selection, processing and closing of the mortgage loan. Loan officers can be paid a commission or salary for their services. They are NOT required by any state or federal law to have an individual license.
A Mortgage Broker is a personally licensed individual or firm that is the middle man between you and the actual lending institution, which can be a bank trust company, credit union, mortgage corporation, or finance company. They will originate your loan; collect your information, then submit your application to one or more lenders, and work with the chosen lender until the loan closes. They have no money of their own, and no underwriters. Mortgage brokers CAN NOT issue loan commitment letters. (Only the actual lender can --- although most brokers do anyway). Brokers can receive their fee from the borrower, or be paid from the “lender” if the loan closes.
A Direct Lender/ Mortgage Lender is a personally licensed individual or firm that originates, processes, underwrites, issues loan commitments, closes and funds their own loans with their own money. Most have in-house underwriters, and have direct access to loan products from all the big national players. If a loan product exists, they can usually offer it. Loan Officers with a direct lender will analyze your financial situation to determine which loan is the best fit for your financial needs. Direct Lenders typically bundle and sell your loan after closing to giant Fannie Mae or Freddie Mac servicing companies. Most are also able to broker loans if needed, giving you, the client, best of both worlds.
Because Home Buyers have so many choices for their lending needs, here at Granite Funding Group, your #1 Direct Lender, it is important for our clients to realize that we are here to provide nothing but superior service. From the time we discuss your application information, to the day we get to congratulate you on your new home! We want our clients to know that choosing us for your Mortgage needs is something we cherish. We are grateful to work with our clients, passionate about our expertise, and determined to meet your needs!
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