Securing Your Loan Through A Wholesale Mortgage Lender
Roaming the banking sector, finance market and researching various loan providing schemes keep you informed about various types of finance that is lent and terminologies that are common in the market.
However, "wholesale mortgage lenders" may be a term few ar attentive to. The word wholesale in brief describes their task. to supply disposal facilities to the retail loan financers at a cheaper price that then is marked up by these retailers to achieve a profit once they sell it to the overall public.
These wholesale mortgage lenders are not easy to get your hands on because they generally don't involve in direct dealings with the public, although the use of a mortgage broker is used as a medium.
The wholesale lender earns a reasonable return when he quotes the retail home loan financer a suitable market price determined by the conditions and including his earnings.
In the same way the retail lender quotes such a price to the general public that it covers the retailers profit as a percentage of the cost they carried out as well a bit more profit if the customer has lack of knowledge about the field and would not resist if billed a larger amount in the loan payments.
The general public should aim to know the actual market rate that the loan was originally transferred so that they have adequate information about the original market value set by the share, the markup percentage of the retailer, and the total principal amount quoted by the retailer.
The public can now negotiate from the retail mortgage lender to set a lower price then charged, as they now have knowledge about the wholesale rate as well.
These wholesale mortgage lenders maintain their determined prices on a secure server online and most of these have special usernames and passwords without which you can not enter their database and view information. These passwords are mainly given out to retail lenders so they pass these prices on to the real consumers with a mark up.
However there's often one website or another that is not password protected and can be accessed by everyone for a certain time period.
If your luck shines and you gain entrance to the bulky and comprehensive knowledge that the wholesalers provide to the retail lenders, the information can serve as a winning chip for you and the retailer would be in your hands.
The general public does not attempt to do business with the wholesalers themselves, but they simply want to bargain their position with the retailers once they have adequate data.
Even after knowing about the market rate set by wholesalers and also having an eye on retailer prices, people find it difficult to bargain properly with retail lenders. The reason being they don't know how much mark up has the retailer added to his cost to earn him a profit, and which increase in price is genuine.
When you contact your broker after having all this information with you, you can plan out your workings and agree together on a concurrent rate after adding up the markup and then bargaining with the retail lender.
Mortgage Lenders Need Top Caliber Funding Sources
In today's crazy mortgage environment, when you're looking to secure financing for your own home, you need to make sure your lender has only the top caliber funding sources available to them. With the rate at which banks and different lending institutions are closing their doors, the last thing you want is to go nine tenths of the way through your new home loan (or refinance loan), only to find out that your mortgage broker's source of funds has suddenly disappeared.
One way you can ensure you don't find yourself in such an unpleasant and risky financial situation is to make sure you know who you're getting your loan from.
Did you decide on your mortgage lender by doing a quick internet search and simply basing your decision on finding the lowest rate?
If so, do you really know who you're getting your loan from? If it's a well known lender such as a Bank of America or Wells Fargo, you shouldn't have any concerns. However, the likelihood that they came in with the absolute lowest rate is probably fairly low.
More than likely, you have received some kind of ultra low quote from some less than reputable broker, from whom you are entrusting one of the, if not THE biggest financial transaction of your life. Are you really comfortable with this?
This is not to say that all brokers are unscrupulous by any stretch of the imagination. Not at all! Many, in fact MOST brokers you will deal with are excellent sources for your mortgage needs.
The concern is when you are shopping online, with people you don't know at all and who have nothing vested in your community and for whom you have no personal references. And when someone like this offers you a deal that sound too good to be true... well, you know the rest, don't you? It usually IS too good to be true.
For one reason or another, many times these super sweet sounding deals simply don't manage to get all the way to the closing table.
If it happens to be because the person or the company you were dealing with suddenly had their funding source dry up overnight, don't say you weren't warned. Stick with the well established, credible, solvent, high caliber mortgage companies, and you will do just fine.
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