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There are many types of loans and lenders available and what you choose will affect your settlement costs and monthly mortgage. The different loans and lenders have different conditions and terms and will
be discussed below.
Choosing whether to get loans from a broker or a lender is the first decision a customer needs to decide in securing loans. But what exactly is the difference between the two? A mortgage lender funds the loans by using
credits under their name. Once the loan closes, the mortgage lender
sells the loan to the bank and gets a commission based on the amount of
the loan and the pre-decided commission rate. On the other hand, the
job of a mortgage broker involves looking for banks who can service a
loan to the client without using their name. They arrange the loan with
the servicing bank and ultimately get paid a commission called a Yield
Spread Premium or YSP.
On the other hand, the financing system offers two ways of lending money to its clients. These are through the direct and indirect lending. In a direct lending, funds are directly transferred from the
ultimate lender to the ultimate borrower. This is often mediated by a
third party acting as a middleman in the transaction. While this is the
case in a direct lending, indirect lending involves a financial
liaison which collects the funds of the many lenders in order to create
a shared pool of funds which they re-loan to interested parties at a
mark-up which is a little over the price of the original funds.
There are also differences in the individuals involved in a loan transaction. There is a distinction between bank and mortgage brokers. Bank loan officers work within a bank, credit union, or other loaning
institution and draw the funds they give out for loaning from their
lending institution which is composed of different funds from different
lenders. On the other hand, mortgage brokers work as freelance agents.
They have numerous lenders and borrowers and they do their work by
matching up people from these two parties in order to strike a deal
depending on the needs of the borrower and the conditions of the
Remember that every type of loaning institution and personnel have their own advantages and disadvantages. In order to acquire a good and secure deal, make sure that you are certain of the type of financing
and transaction you need and surely, a good and smooth loaning and
funding for your future is at your hands. Try visiting our offered
loans in our site and see for yourself what type of loans are perfect