Mortgage Lender Explained - part 1
by Mark Keller
There has never been a more prosperous time for the real estate market in Salt Lake. More people are relocating to the Salt Lake Valley than ever before. With property prices much lower than the national average home buyers are able to find their dream home in Utah for a much lower price than anywhere else in the nation. Now is still a great time to get involved in the real estate market here. Real Estate can be an intimidating undertaking. There is a lot to learn before you jump in and start investing. Let's go over some of the basics, specifically the difference between a mortgage broker and mortgage lender.
Like the rest of the country a Salt Lake City Mortgage Lender or broker will assist you in making the biggest purchase of your life. They can also help you accumulate wealth through real estate investing if you prove credit worthy and stable. I think that the mortgage part of home buying is the most difficult to understand. It is a complicated process that most people only go through once or twice in their life time. It is a daunting task to jump into the world of mortgages. A mortgage broker can help you understand and evaluate different types of mortgages and select the one that best fits with your financial goals and situation. A Salt Lake City Mortgage Lender is the one who actually provides the money to the borrower at the time of closing. The lender then receives a note showing the borrower's debt and obligation to repay. This note includes a lien on the property. If the borrower is delinquent on the payments the loans is defaulted and the properties is seized. Lenders who perform all the loan origination themselves are called "retail lenders". Retail lenders are very similar to mortgage brokers but they are the ones actually sponsoring the loan. Lenders who have many functions performed for them by mortgage brokers are know as wholesale lenders. It is not unusual to find a Salt Lake City Mortgage Lender with retail and wholesale divisions. A Salt Lake
City Mortgage Lender or broker will list prices through a loan officer. A loan officer then will offer those prices to the consumers. Loan officers usually are limited in their ability to reduce the price but can if necessary to match the competition. However, they do have full discretion to raise the price if they can. The difference between the listed price and the actual price charged the consumer is called an overage. The amount of the overage significantly impacts the amount of the commission the loan officer receives. From my experience with Salt Lake City Mortgage Lenders the average home buyer will do better dealing with a mortgage broker than with the lender. Simply because the mortgage broker works closely with several lenders and will shop for the best terms available for any given loan. In addition, they can find lenders who specialize in different market niches, such as loans to applicants with poor credit ratings. There are other types of Salt Lake City Mortgage Lenders. A Mortgage banker for example. Mortgage bankers sell the loans they acquire because they lack the long-term funding resources necessary to hold the mortgages permanently. Mortgage bankers fund loans by borrowing from banks or by selling short-term notes, then repaying when the loans are sold. This has become a very common practice in the mortgage industry. Understanding these basic terms and the different roles and interests associated with them will help you be better prepared to get involved in the real estate market. In review a lender is the one who actually sponsors the loan while a broker acts more a middle man and match a borrower with a lender that will offer the right loan at the right price.
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Mortgage Lender Explained
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