Different Types of Lenders

A large part of picking the right mortgage lender for your next home purchase will involve understanding the various types of companies that can offer you lending options.

Each of these types of lenders offers unique advantages. If you’re not sure of which type is best for your purchase, or if you don’t have a strong preference after understanding the differences between them, you can apply to any combination and review the loan estimates they provide you, letting the financial factor act as your guide.

Conventional Banks

Many consumers have a checking and savings account at a bank, and lots of conventional banks offer home loans in addition to their deposit accounts. Some buyers prefer the convenience of working with the institution that already takes care of their day-to-day financial transactions, but the mortgage process can seem impersonal at conventional banking organizations. They might not have as many mortgage options or offer the flexibility that will support your specific needs as well.

Credit Unions

Similar to banks, credit unions typically offer mortgages to their members. Compared to larger banks, you’re likely to receive more personalized service from a smaller, more local credit union.

Non-Bank Mortgage Lenders

These companies specialize in mortgage lending and don’t offer deposit accounts. Because they often provide only mortgages, they can usually offer quicker turnaround times, along with a higher level of personalization and expertise about the process. They will usually have a larger variety of loan programs and are where you can find the expertise you might need for new construction, renovation, or other niche lending solution.

Mortgage Brokers

Brokers act as intermediaries between buyers and potential lenders. They search for loan options on your behalf and will work with you to find the best choice. While this can take some of the stress out of the process on your end, it usually results in additional costs to cover the broker’s commission or fees.

Each of these types of lenders offer unique advantages. If you’re not sure of which type is best for your purchase, or if you don’t have a strong preference after understanding the differences between them, you can apply to any combination and review the loan estimates they provide you, letting the financial factor act as your guide.

Source:https://fhmtg.com/2021/07/15/how-to-choose-a-mortgage-lender/