Mortgage Lenders

Mortgage Bankers and Mortgage Brokers

You can get a mortgage either from a mortgage banker or from a mortgage broker. A mortgage banker is a direct lender; it lends you its own money, although it often sells the loan to one of three primary mortgage lending institutions in the US market. A mortgage broker is a middleman that deals directly with loan shoppers on behalf of one or more mortgage bankers; he or she consider loan applications, analyzes borrowers financial capacity and connects the borrower to the real lender. Many bank lenders do not deal directly with the public, relaying exclusively on mortgage brokers for the loan shopping.

A mortgage banker may offer you lower fees, easier paperwork process and direct approval, since there is no intermediary fees or intervention. On the other hand, a broker is normally connected with a variety of banks and can choose for you a mortgage best suited to your needs from a wider choice, while a bank can give you only its own limited offers. Moreover, a broker can help you to expertly prepare your loan application to the bank, rising the chances of approval.

Where the Mortgage Money Come From

Often mortgage bankers bundles your loan with many others and sell the whole package to one of the three primary primary lending institutions, which are:

• Federal National Mortgage Association (FNMA), also known as Fannie Mae.

• Federal Home Loan Mortgage Corporation (FHLMC), also known as Freddie Mac.

• Government National Mortgage Association (GNMA), also known as Ginnie Mae.

The banker sells your loan to them and cash the money, so he or she can lend the same money again to other people and and repeat the process again and again. In the end, the money for mortgage loans come from one of these institutions, but you cannot deal face to face with them. It is the bank, directly or through a broker, who deals with you.

Where to Find a Mortgage Lender

At left you can find extensive state directories of mortgage lenders. You can browse the directory of your state, select one or several and contact them online or by phone. Remember that in selecting your loan provider, important factors are the reputation, the length of time in business, company size and experience in investing on properties.

Caveat Emptor

According to the Federal Trade Commission, you may be signing on for trouble if a mortgage lender:

• Encourages you to falsify your application information to get the loan.

• Urges you to borrow more than you need.

• Pushes you to accept payment terms that you can't realistically meet.

• Fails to give you the required disclosures (e.g., APR, rescission rights, etc.).

• Shows up at closing with a totally different loan product than you agreed to.

• Asks you to sign blank forms. ("It'll speed things up. We'll fill in the blanks later, trust me.")

• Denies you copies of documents you signed.

Use common sense and don't dismiss any of those signs if you find one. Otherwise chances are that you will meet the trouble you signed for. If you can, choose the more honest and reliable mortgage lender.

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