Why You Need to Understand the Difference Between Home Lenders
As a savvy consumer, paying minimally for high quality is the way to go. This means clipping coupons, shopping to find the best prices and reading reviews to ensure you buy the best products for your money. Since you put so much effort into saving money and choosing the right products for small purchases, it only makes sense that you would want to do the same for larger purchases. Being a well-informed consumer is why you need to understand the difference between home lenders.
What Are the Three Types of Home Lenders?
While there are always exceptions to the rule, there are normally three different categories of home loan lenders:
- Mortgage Brokers — These are smaller institutions. They do not lend their own money, nor do they make underwriting decisions or provide closing documentations. They simply act as a middleman between bank and borrower. While these smaller institutions can have a friendly feel, they do not generally offer any service a consumer can’t find elsewhere.
- Large Commercial and Retail Banks — Large credit unions and retail banks are on the other end of the spectrum. They provide mortgage loans for their own customers and often take care of the back end of the deal for smaller clients, too. The big four include Wells Fargo, Chase, Citi and Bank of America — but there are others as well. Together, these large retail banks control a huge portion of the U.S. mortgage-lending market.
- Mortgage Banker — While fewer consumers know of mortgage bankers by name, this third type of lender is often the perfect solution. Like a smaller, friendly mortgage broker, the banker is able to browse to find the best deal possible, but like a retail bank, these mortgage bankers also lend their own money and make underwriting decisions at times. With more options, and often extremely low rates, there is a better overall client experience for most who choose to go this route.
What Else Should Consumers Do to Learn About Differences Between Home Lenders?
In addition to understanding the three basic types, potential homebuyers should ask family and friends for recommendations or research local mortgage lenders online to read reviews. The Internet is a great place to start learning more about mortgage lenders, and the best companies should have many positive reviews.
If you are beginning your search for a Chicago-area mortgage lender, United Home Loans offers many benefits that help us stand out. We are a family owned firm with a strong focus on customer service and client experience. As a mortgage lender, we provide customization that big banks can't offer and promote on-time, in-house closings. We have the perfect balance between big bank offerings and small company service. Give us a call or contact us to get a quote today.