Now that you are preparing to apply for a purchase or refinance loan, you are understandably focused on finding the most competitive rate available to you. Many people assume that the best rates are available through a bank or a lender. After all, a mortgage broker is a middleman, so you can reasonably assume that the middleman will inflate the rate, fees or both. In reality, your mortgage broker is your direct door to great rates on wholesale mortgages.
A wholesale mortgage is one that is directly accessed via a lending partner. A retail mortgage, on the other hand, is accessed via a bank or mortgage lender. Can you circumvent the mortgage broker to access great terms on a wholesale mortgage? These lenders generally only work with mortgage brokers, so you must apply through a mortgage broker for access to them. The good news is that many wholesale lenders can structure the mortgage broker’s fees into the transaction. Specifically, the broker can charge you a fee directly, or the wholesale lender will compensate the broker. If the lender compensates the broker, the interest rate may be marked up slightly.
When you apply for a loan directly with a retail lender, like a bank, you are only applying for the financing programs offered by that bank. On the other hand, when you apply for a mortgage through a broker, the broker will explore a wide range of wholesale loan programs to find one that is a great fit for your qualifications.
A wholesale mortgage often has better rates and terms than a retail mortgage, but this is not always the case. Consider applying with a mortgage broker and with a few banks directly to find the best offer available based on your qualifications and loan scenario.
Contact one of our loan consultants to learn more about this program.