What Are the Different Types of Mortgage Lenders?

A mortgage lender is either a financial institution or a mortgage bank that provides home loans. The lender also underwrites the loans. Each lender has their own specific borrowing guidelines that they use to determine their lending criteria. Based on this criterion, the lender sets the interest rate, loan terms, and repayment schedule.


Let’s talk about different types of mortgage lenders:

Retail lenders


A retail lender offers mortgage loans and personal loans directly to the consumers instead of other institutions. Examples of retail lenders include credit unions, mortgage bankers, and conventional banks. Other than mortgage loans, retail outlets also offer checking and savings accounts.


Direct lenders


Direct lenders use their capital or originate their loans. If they don’t have enough money, direct lenders also tend to borrow from elsewhere. Contrary to a retail lender, a direct lender specializes in mortgages. They don’t offer multiple financial products to consumers.


Since direct lenders cater to a niche of home loans, their underwriting process is less strict, and the qualifying guidelines are flexible. This is why direct lenders are a more feasible option for borrowers who have complex loan files.


Most direct lenders offer their services either online or through limited branches. You might need to apply with multiple direct lenders to shop for a rate that suits you.


Hard money lenders


If you’ve exhausted most of your lending options, a hard money lender is usually the last resort. Hard money loans are particularly a viable option for those looking to renovate their homes for a quick resale.


Hard money loans are offered by private lending companies that have substantial cash reserves. These are short-term loans that are also great for real estate investors who want to repair and resell homes to make quick profits. Compared to traditional bank loans, hard money loans are flexible and rely on the property as collateral to secure the loan.


Global Capital Partners Fund LLC is one of the most reliable and flexible hard money lenders in New York. The company specializes in several commercial financing solutions, including asst-based loans and bridge loans.


Over the last few years, GCP has expanded its operations over a large number of states. You can start by filling out your loan application straight away!

Categories: Finance

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