Today you have options when sourcing a mortgage. There are three types of organizations that offer mortgages to consumers: Mortgage Bankers, Mortgage Brokers, Traditional Retail Bank.
Mortgage Banker – A mortgage banker is also known as a direct lender. These organizations work directly with you as well as investors to secure the best loan at the best rate. These firms can underwrite and provide the funds for your home loan. In turn, they can combine loans and sell them to investors who continue to service the loan at the contracted rate.
Mortgage Broker – A mortgage broker will work with you by taking your information and “shopping” it to investors for your behalf. Once an investor is identified, they will act as an intermediary until the loan has been funded.
Retail Bank – A traditional retail bank will underwrite and fund a mortgage. The programs offered tend to be limited to options offered by the bank. They do not work with other investors to solicit options. Keep in mind that banks have many departments that buy and sell their money. They are not necessarily experts in mortgages.
The best mortgage options are available through Mortgage Bankers and Mortgage Brokers. Mortgage Bankers have the advantage of being able to assume the responsibility for a mortgage loan. They process, underwrite and fund (lend the money) a loan. They can then work with investors to take over the loan. The loan is not dependent upon the investor.