When you decide to own a home, it usually comes along with a mortgage. There are many types of mortgages you will find out there and they come from three major types of lenders. Here are the three major lenders you are likely to encounter when you own a home or plan to purchase one.
These are not actually lenders, but somebody that will help you find a mortgage. Mortgage brokers work with multiple types of lenders and can search their database for the best deal for you. However, you will pay a fee if you choose a loan through a broker, but they will be able to compare multiple lenders for you.
The most common type of mortgage lender is a retail bank. These institutions come in many shapes and sizes from local banks to credit unions to worldwide banks. Usually, these banks require a higher credit score for approval, but they often have some of the lowest interest rates on out there.
Retail bank are flexible, if you're already a customer. They are often very well-known, as well. You can use them for all of your financial needs, which can also provide quite a bit of convenience.
Similar to a Retail Bank, a Mortgage Bank approves and underwrites their own loans for consumers. The biggest different is that they only work with mortgage and don't offer any other financial products. This can provide an advantage because they specialize in home financing and often have programs for multiple types of buyers.
Finding the right mortgage lender for your situation is vital to the home buying process. If you plan to purchase a home, you may want to compare all three types of lenders to see which will provide the best deal for you.