There are different types of lending available to those looking for a new mortgage. The information below should be helpful in deciding where to go for a mortgage and what is best-suited for your particular need:
-More widely trusted by many borrowers because of their stability.
-Tend to have higher rates than some other mortgage lenders.
-May not have the widest selection of products.
-Fast turnarounds and consistent underwriting practices.
Savings Associations/ Federal Savings Banks/ Thrifts:
-Focused on mortgage lending and offer a wide variety of loan products.
-May have more flexible underwriting standards.
-Depending on whether they sell loans on the secondary market or keep them as portfolio loans, credit availability may vary.
-Only available to members of the credit union.
-Underwriting standards can be fairly rigid.
-Products are limited to the basics.
-Rates are usually very competitive since credit unions pass their profits back to their members.
Mortgage Bankers and Brokers:
-Aggressive in underwriting and rates.
-Loan officers work on commission, so they tend to work harder for their clients.
-Borrowers tend not to trust these lenders as much, because they do not have big, household names.
-Underwriting standards are set by the secondary market, so they may be less flexible in taking mitigating circumstances into consideration.
-Brokers will have the widest selection of products since they can place products with a variety of lenders.
-Borrowers must take into consideration additional brokerage fees.