Who's Who In The Real Estate Transaction

Realtors, Lenders, Mortgage Brokers, Appraisers, Title Companies, and Mortgage Insurers.

Banks -- are direct lenders that sometimes loan their own money. Banks generally have many loan programs that have been approved to offer to borrowers for the loan programs that get them the best profit. Banks offer FnMA, FHLMC and in-house Portfolio Loans. These portfolio loans offered by Banks are usually at competitive interest rates and require less qualifying paperwork than their Mortgage Broker competitors because the loans are not being sold to another institution outside of the Bank. These portfolio loans generally have a balloon payment which will be due within three to five years.

Mortgage Brokers -- Use the loan programs of other lenders and usually have the same loan programs as most banks. The money source (lender) must actually approve you, but good brokers don't submit loans they think will be declined. Most brokers are working with many banks and Mortgage Bankers and usually have better Fixed Rates than Banks. If you are turned down by their money source, they can easily submit to another lender for approval, usually at the same interest rate. Brokers don't get paid until the loan closes, so they try to get the loan funded.

Mortgage Bankers -- are also direct lenders that sometimes loan their own money. Mortgage Bankers use their own money or other money sources, just the same as Banks. Like Banks, Mortgage Brokers can approve their own loans when they use their own money. Like Banks and Brokers that use other money sources, those sources have to approve the loan. Like Brokers, if you are turned down, even for their own loan programs, they can easily submit you for another program or to another money source. Like Brokers, they don't get paid until the loan closes.

Banks and Mortgage Bankers usually sell their loans to other investors so they can always have money to lend. They may or may not have servicing departments to service the loans. Most lenders will sell off the loans in 6 months to 1 year to larger investors like Fannie Mae and Freddie Mac.

      
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