Choosing a Lender, Broker, or Correspondent Lender
Lenders are banks, mortgage banks, or other financial institutions. They impart their own funds and have loan officers correspond with customers and underwriters to achieve final loan approvals.
Brokers do not lend money, but they locate an individual a lender to fund a loan. A portion of the paperwork to fund the loan may be accomplished by them, but the lender upholds the underwriting approval.
Correspondent lenders are able to either finance your mortgage themselves or find a traditional lender to fund an individual’s mortgage. They are able to execute underwriting even if the loan is appointed to a lender for funding.
What questions should you ask when interviewing lenders?
After describing the type of mortgage you want, ask: What is your interest rate on this type of mortgage?
What would be the closing costs for this loan?
How many years of experience do you have and how many loans have you done in the past year?
Is there a charge for pre-approval or submitting loan applications?
Can you give me referrals from two of your customers?
Have you had experience with VA, FHA, or other loan types?
Do you know any programs I might qualify for?