The mortgage process can be confusing because of all the different types of lenders involved in home loans and refinancing. There are several types of lenders: direct lenders, wholesale lenders, retailers, mortgage brokers and portfolio lenders.
Borrowers often just go straight into the process, looking for terms that seem reasonable without thinking about who their lender is. Understanding the differences between lenders can help you make sure that you get the best deal. If you’re looking for the best mortgage lenders in Elk Grove, visit https://www.sumerhomeloans.com/.
There is some overlap between the different categories. Portfolio lenders are more likely to also be direct lenders. Many lenders may be involved in multiple types of lending, such as large banks that have both wholesale and retail lending.
Wholesale and retail lenders
Wholesale lenders are banks and other institutions that don't deal directly with customers but instead offer loans through third parties like mortgage brokers, credit unions or other banks. These are often large banks with retail operations that deal directly with customers. Many large banks such as Bank of America or Wells Fargo have both wholesale operations and retail operations.
This type of lending is made by wholesale lenders. The name of the wholesale lender will usually appear on loan documents. In most cases, the third party, whether a bank, credit union or mortgage broker, is acting only as an agent and charging a fee.
They are lenders that issue mortgages directly to consumers. Retail lending can be done by them directly or they may act as agents. However, this function may only be offered by larger financial institutions that may offer other financial services, such as commercial, institutional, and wholesale lending.