If you are in the wholesale mortgage industry, you should know that being a wholesale mortgage lender can often be the same as being a wholesale mortgage banker. You get paid to lend money to other people. And, you have a lot of work to do. But, there are many differences between your job as a wholesale mortgage lender and as a mortgage banker. Here are some.
As a wholesale mortgage lender, you will most likely deal directly with the mortgagors. In fact, most of your customers will be. But, you will still have to find a way to get your wholesale mortgage products to your customers. This means you have to buy mortgage leads and resell them. You may also have to buy wholesale mortgage insurance, wholesale mortgage leads, or wholesale mortgage brokerages.
As a wholesale mortgage lender, you don't have to deal with underwriting. If you decide to go that route for your business, it's going to take time and a lot of effort. You can't assume everyone you work with will qualify for a wholesale mortgage. After all, not everyone has good credit. And, if you don't know how to market to people who have bad credit, you'll just waste your time and money.
As a wholesale mortgage lender, you can only deal with people who are willing to purchase mortgage notes. If you've found a group of people you want to work with, they have to be interested in what you can offer them. Otherwise, you're not going to make much money. That's because you want to sell as many mortgage notes as possible, but you need to make sure you're only getting serious business from the people you really want to work with. After all, if you give your wholesale mortgage lender a call to tell them about a new client that you believe will pay off big, you're not going to wind up with any new business. It's going to be more work for you if you go to a lender that isn't familiar with the people you're dealing with.
Your goal as a wholesale mortgage lender is to get the best terms and the best interest rates available. As a wholesale mortgage lender, you have a variety of different options for clients. You might find clients who want to purchase a single, high-risk note and get a lower interest rate than they might if they were buying two or more notes. If you have a wholesale mortgage lender you work with on a regular basis, it's easy to see how it would benefit both you and the person you're working with to secure the loan. You can even offer incentives to clients who are successful in securing a loan.
The most important thing to remember when you provide your wholesale mortgage lender with customer information is to keep it safe. After all, the information you give out may be the only thing between you and your new client. A wholesale mortgage lender isn't responsible for your customer's debts and it's the borrower's responsibility to keep those debts paid off. It's not uncommon for customers to fall behind on their payments because of illness, job loss, or whatever else causes them to miss a payment.
When a person falls behind on their loan, the first thing they do is try to come up with an excuse as to why they were late. The problem here is that no one really knows what the reasons are unless the customer tells them. This can cause problems for both the wholesale mortgage lender and the customer, as the lender will have an issue trying to collect the amount owed and the customer will have to explain why they were late on the payment. If you provide the loan to the right person, you can make it easy for the customer to pay the debt off and you'll be able to move onto other clients.
Another good thing about working with a wholesale mortgage lender is that they are often more flexible than a regular bank. A regular bank might not be willing to work with someone that doesn't have a good credit history. This is an issue for wholesale lenders as well, but since they are in the business of providing loans to people, it's something that they have to deal with. They might be more willing to work with a customer that has a bad credit history, however.