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Home Mortgage Preparation :: Wholesale Mortgage Lenders
Wholesale Mortgage Lenders: How Mortgage Lenders in the Wholesale Sector Operate
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If you've been shopping for a mortgage, you may have heard the term “wholesale mortgage lenders,” but what does that mean and how do these wholesale lenders affect you as a consumer?
For more information on wholesale lenders, keep reading for a breakdown on how they operate.
How Wholesale Mortgage Lenders Operate
A wholesale lender uses mortgage brokers as their link to the public and even as their internal loan officers. You, as a consumer, will typically never deal directly with a wholesale lender.
Typically, they offer a nice lower rate directly to a broker, who then adds his or her commission to the deal, and you wind up with a similar rate to one obtained directly from the bank or another lender.
The Advantages of Wholesale Mortgage Lenders
The main advantage of obtaining a mortgage through a broker is that they can target your application and your lenders – meaning they can look at your financial portfolio, their own list of wholesale mortgage lenders and their requirements and then see which ones best fit together.
In addition, if a loan is rejected, your broker can easily repackage the application and submit it to different wholesale mortgage lender.
Disadvantages of Wholesale Mortgage Lenders
The main disadvantages of using wholesale mortgage lenders and brokers include not knowing your true rate and the possibility of having your loan sold.
Because you aren't privy to the arrangement reached between your broker and the wholesale lender, you don't know exactly how much compensation or commission the broker is adding on to the deal. To counteract this problem, try obtaining quotes from two to three brokers.
Also, when dealing with wholesale mortgage lenders you run a higher risk of having your mortgage sold.
Typically, this means little more than a notification sent to you, but it can affect the level of customer service you receive, how lenient your new lender will be and your own business relationship with the lender.
Wholesale mortgage lenders aren't evil or sinister, they're simply away from the public eye. Because they don't deal directly with the public, consumers aren't as familiar with them and their services.
But, the truth is their business model helps get potential home buyers into their future homes.
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Home-Mortgage-Preparation.com :: Wholesale Mortgage Lenders