Mortgage Lenders

A mortgage lender is a company who advances funds to individuals for the purpose of purchasing real estate. Mortgage lenders can be banks, credit unions, a mortgage company, a mortgage broker or an organization that meets the strict guidelines to offer home mortgage loans. Competition between mortgage lenders is fierce and interest rate and fees are different from lender to lender. A smart homebuyer researches mortgage lenders to secure the lowest fees and lowest rate for their real estate transaction.

Mortgage brokers connect mortgage seekers with lenders and lending institutions. A Mortgage broker is never a lender. Brokers receive commissions by sending lenders referrals. If these referrals succeed in becoming a successful transaction, they are paid a percentage. It is wise for the mortgage seeker to contact several brokers to determine if they have a lender that meets your requirements for a loan. Loan brokers work with various lenders and should be able to find you the loan and interest rate you are demanding. Competition is stiff when it comes to mortgages. With the difference in costs, fixed rate and adjustable rate loans and associated fees, mortgage brokers can take your personal preference and find you the right lender.

Some financial institutions operate as lenders and brokers. Be aware that a broker is paid in terms of "points". A point is equivalent to 1 percent of the loan amount, and this is money that you pay out of pocket to obtain the loan. One percent may not seem like much, however, if your loan is $200,000, your point just cost you $2000. I am sure there are many other ways to spend the $2000 unless you are unable to get the same rates without the use of the broker. Remember, everything is negotiable and that pertains to rates, fees and points.