Shop Around: Ask Several Lenders

Last updated: February 4, 2016

Four Common Types of Lenders:

  1. Thrift institutions (a.k.a Savings and Loan Associations or Savings Banks)

  2. Commercial banks

  3. Mortgage companies

  4. Credit unions.

Each lender could offer you different products and prices, so it is best to hear several offers.

Understanding Brokers

A mortgage broker can also offer you a home loan.

A broker differs from a lender by bringing a borrower and a lender together rather than lending the money themselves.

  • A broker has access to a large group of lenders, which means more options for you.

  • A broker is not required to find you the best loan package (unless you have specifically contracted with them to be your agent).

    • Contact more than one broker to find you the best deal as well as institutions.

When Contacting Lenders and Brokers:

  1. Make sure you know whether the financial institution is acting as a broker or a lender.

    • Many institutions operate as both, and often brokers do not advertise themselves as brokers.

  2. If a broker is involved, be sure to ask how the broker will be compensated for the sale.

    • A broker makes money from a fee of some sort when the mortgage sale closes. It is important to know and compare broker fees alongside various mortgage offers. You can negotiate with both brokers and lenders

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