Here are the basic differences between the variety of lenders that you can consider :
- More widely trusted by many borrowers because of their stability.
- Tend to have higher rates than some other mortgage lenders.
- May not have the widest selection of products.
- Fast turnarounds and consistent underwriting practices.
|Savings Associations/ Federal Savings Banks/ Thrifts
- Focused on mortgage lending and offer a wide variety of loan products.
- May have more flexible underwriting standards.
- Depending on whether they sell loans on the secondary market or keep them as portfolio loans, credit availability may vary.
- Only available to members of the credit union.
- Underwriting standards can be fairly rigid.
- Products are limited to the basics.
- Rates are usually very competitive since credit unions pass their profits back to their members.
|Mortgage Bankers and Brokers
- Aggressive in underwriting and rates.
- Loan officers work on commission, so they tend to work harder for their clients.
- Borrowers tend not to trust these lenders as much, because they do not have big, household names.
- Underwriting standards are set by the secondary market, so they may be less flexible in taking mitigating circumstances into consideration.
- Brokers will have the widest selection of products since they can place products with a variety of lenders.
- Borrowers must take into consideration additional brokerage fees.