Understanding the 3 types of lenders

In general, there are three types of lenders in the market.

1) Banks

2) Brokers

3) Correspondents

Banks are normally the entity with in-house underwriting and close loans with their own money.  Many times, banks have specific products for specific types of properties such as manufactured homes or luxury homes or for specific types of buyers, like doctors.

Brokers may become a dying breed due to new regulations.  We shall see.  These guys collect a yield on the loans they originate and have lots of freedom to work with banks, investors, etc.  Normally, brokers can’t work with the lower credit-score buyers.  If you have a high credit score, they might be able to get you the best deal.

Correspondents are companies that use their own credit lines for purchase money.  After they close the loan, they will sell it.

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