A Mortgage Banker is a company or a corporation, like a bank, that lends its own funds to borrowers and also brings together the borrowers and the lenders. A loan officer who works for a bank can also be called a mortgage banker. The function of the mortgage banker is to sell the underlying loan to an investor and often the mortgage banker continues to service the loan. Sometimes the mortgage banker also sells the loans to secondary markets.
Often the borrower approaches the mortgage bank directly with the intention of getting corporate service and rates. Since, the mortgage banker is the lender; the borrower might want to approach the source of finance directly. While dealing with mortgage banker, one can be sure that there will be stability in terms of compensation which the banker will require in return of the services provided. Mortgage bankers primarily have only one focus of business, i.e. to make mortgage loans. For this reason, they typically offer very attractive loan programs and rates.
Even if the borrower uses the services of a mortgage broker to act as a middleman, the ultimate decision to approve the borrowerĄ¯s loan application is with the lender. And it can be more economical as you save the fees of the middleman and make the process faster if you go directly to the source. However, a mortgage banker will offer you various schemes of only the lender in question. If you need to compare your offers, you would need to discuss with several lenders to do comparative shopping. You can browse through the real estate section of your local newspaper to get an idea of the lenders and their rates in your area. You can also search for mortgage bankers over the Internet or through Yellow Pages. Also, if your application is not accurate and is presented in poor light, you probably havenĄ¯t made a good impression on your mortgage banker. When you use the services of a mortgage broker, he or she might help you restructure your application legally to suit the requirements of each lender.
As money-lending institutions, all mortgage bankers are subject to regulation. You can check on how the industry is regulated in your state by contacting either the state's department of banking or division of real estate. You can check there for any licensing requirements, and check if the particular lender is in good professional standing. The Library of Congress has an index of state and local government web sites.
When you are a choosing a mortgage banker, there are several factors that play part. It might help if you choose a lender with slightly flexible terms, so that you can get the job done on a deadline. You also need to choose a lender of a decent size, so that you can have security and personal attention both. Also, choose a lender that can deliver what it promises. It is also advisable that your lender has a good standing in the market and is well-established, i.e. it is in the business for a few years at least. You can check the mortgage bankerĄ¯s company history with the local Better Business Bureau in your area. In a number of state mortgage bankers are required to be licensed, so you can also check the credibility of the banker. You can also ask other investors and real estate agents in your area to give their suggestions and referrals. It is important that you deal with a mortgage banker that has experience with investor loans. Also, choose a banker who offers a variety of deals and offers the facility to switch the loan program if you find out that a particular loan program is not working for you.
You must be sure that the mortgage banker you are thinking of taking a loan from is reputable. Check whether the mortgage banker is a member of the Mortgage Bankers Association of America. The members of this association originate and service commercial and residential mortgages.
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