What is it that a wholesale mortgage lender has to offer mortgage loan seekers? Is it loans at low interest rates? Is it the ability to secure a lower rate? In this article we will examine the benefits of wholesale mortgage lenders.
What is the wholesale mortgage lender? The wholesale mortgage lender is one that purchases homes from people who wish to get into mortgage loans but do not have enough funds for their home mortgage. Then the lender would sell these homes to real estate brokers or individuals who wish to buy them. Wholesale mortgage lenders would either sell the homes on their own or they would pass these properties off to another party. The point is wholesale lenders are large financial institutions that purchase massive amounts of mortgages and then pass them out to individuals who can ill afford them.
There are a number of different types of wholesale mortgage lenders. They may specialize in one type of lending, such as wholesale commercial lending, or they may offer a wide variety of mortgage products. There are banks that solely deal with wholesale lenders, which means they only deal with people looking to purchase houses and not actual sellers.
There are a number of advantages to working with a wholesale lender. First of all, these wholesale lenders typically understand the complexities of the real estate market and they are able to pass on the savings to their clients. Because of their large size, wholesale lenders often have access to cash. This is important because sometimes real estate investors need extra money to purchase a house and the wholesale lender can provide them the needed funds.
Another advantage to working with a wholesale lender is that they can offer you a good deal on your mortgage. Since wholesale lenders purchase so many mortgages each year, they are privy to many deals that other lending institutions are not privy to. For example, wholesale lenders are able to secure deals on foreclosure houses and bank owned properties. When you work with a wholesale lender, you stand a better chance of getting a great deal on your mortgage. You can usually negotiate a better interest rate when working with a wholesale lender, as well.
One disadvantage of working with a wholesale mortgage lender is that most do not provide free credit counseling. This means if you have a bad credit history, you may not be able to get a good deal on your new home. However, if you have excellent credit, you can still get a great rate on your new mortgage. As long as you are willing to pay extra for premium credit insurance, you can likely find a good wholesale mortgage lender that will cater to your needs. Even if you cannot qualify for a specific deal, you can still find a good deal when you work with a wholesale mortgage lender.
Before you start working with a wholesale lender, you should contact the Better Business Bureau to see if any complaints have been filed against the company. If there have been no complaints filed against the company in the past five years, you can assume that the company is reputable and may be able to help you get a better deal on your mortgage. You should also find out what the interest rates are for the wholesale loans the wholesale lender is offering. If the rates are higher than your local banks or other lending institutions, it may be worthwhile to work with another lender. Find out what other wholesale lenders offer in terms of interest rates for the type of loan you need.
In general, working with a wholesale mortgage lender can be an advantageous situation. You can save money when you work with one and get a great loan that you can afford. However, you should always check with the Better Business Bureau before you sign any type of agreement with a wholesale mortgage lender. If you do not feel comfortable with the services they are offering, you may want to look somewhere else.