When you’re buying a home for sale on 30A, you’ll most likely need to work with a mortgage lender – but how do you figure out which one is best for your needs? You start by understanding the various types of lenders.
Types of Mortgage Lenders
These are the five main types of mortgage lenders:
- Credit unions
- Mortgage bankers
- Correspondent lenders
- Savings and loans
- Mutual savings banks
Here’s a closer look at each.
#1. Credit unions
Credit unions are member-owned banks that often offer the best rates to their shareholders. (Each member is a shareholder.) They used to be tough to join, but many have eased up their restrictions – and that means you might have an easier time finding and joining one.
#2. Mortgage bankers
Mortgage bankers work for specific financial institutions. They package loans and the bank’s underwriters consider them.
#3. Correspondent lenders
Correspondent lenders are typically local mortgage loan companies. These companies initially fund your loan, then sell it to a larger financial institution (like Wells Fargo or Chase).
#4. Savings and loans
There are fewer savings and loans banks around now than there used to be, but they still exist. They’re usually community-oriented and small, but they often fund home mortgages for locals.
#5. Mutual savings banks
Mutual savings banks are “thrift” institutions, similar to savings and loans. They’re usually locally focused, too, and they can often offer competitive rates on mortgage loans.
If you’re not sure what type of lender is right for you, it’s a great idea to start calling around. You’ll want to go with the financial institution that offers you the best possible rates and terms.
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