Understanding Mortgage Lenders
One of the first things you need to understand about the mortgage business is there are basically three different types of ways to originate a mortgage loan. They are through a Broker, a Retail Bank or a Correspondent Banker/Broker. Here is a brief explanation of the three.
Mortgage Brokers
A Mortgage Broker arranges loans through a third party, typically a “wholesale” lender. Since the Mortgage Broker has no money to lend and does not make lending decisions, this creates a lack of control of the process of approving and closing your loan. They can only prepare an application package and submit it to a lender or a number of lenders for approval. Mortgage Brokers have number of “wholesalers” to submit loans to, which can create options for the borrower. However – the Mortgage Broker channel has gone through significant changes in the last year – the “wholesalers” they broker these loans to know that they have no recourse when dealing with this business channel – and therefore, it has become extremely difficult, if not impossible to deliver a reliable closing for their customers. At FHA Pros Online, we believe this channel could eventually disappear altogether.
Retail Banks
A Retail Bank controls the process and has the money to lend the applicant. But the downside for you is that many Retail Banks are limited to the number of products or options they can offer the borrower, & the rate and costs are usually less competitive because they don’t shop the other banks.
And since they typically use a centralized underwriting, processing and closing department, it gives your Loan Officer little control as to the outcome.
Correspondent Banker/Broker
At FHA Pros Online, we operate as a “Correspondent Banker Broker”.
We believe that this provides the most flexibility, the lowest rates and fees, and the delivery a predictable outcome for you - the customer.
We focus 100% of our business on residential mortgage financing only. This business model allows us to provide our clients the best of both the Broker and the Banker worlds.
As a “Correspondent” we employ our own underwriters, maintaining control over your loan approval, and more importantly, the speed at which we can deliver that approval.
As a “Banker”, we control the delivery of the final loan documents and most important, the delivery of your money to the closing table. We control the entire process, from application and approval through the use of our own money to close your loan.
As a “Banker Broker” we maintain the ability to choose which Bank will ultimately service your loan, allowing us to select the Bank that is most competitively price the day you lock in your rate, without jeopardizing your approval.
As an added bonus we are an FHA Direct Endorsement Lender. Simply put, this means we have achieved & maintain the highest standards in residential mortgage lending. This gives you the peace of mind that we know what we are doing, and your loan will always close “On Time, Under Budget, with No Surprises!”
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Why you must stop renting
