What Is a Correspondent Lender?
Before you can even begin to discuss the advantages of using a correspondent lender, it is important to understand what makes a correspondent lender different from your average lender. A correspondent lender is unique in that they originate their loans themselves. In fact, they not only originate the loans, but they also underwrite and fund the loans under their name.
Once the loan has been processed, they will then sell the loan to a larger mortgage lender who then becomes your loan servicer. This servicer is then the one that you report to when you pay your monthly mortgage payments or have other questions about your loan. Should they want to, this loan servicer may then sell your loan to another institution such as Freddie Mac or Fannie Mae.
What Are the Advantages?
Now that you have an understanding of what a correspondent lender is, what makes them so much better than any other lender? There are several advantages to consider when you are deciding whether or not to work with a correspondent lender.
Funds Their Own Loans: When you work with a correspondent lender, they will be the ones who fund the loans. This is typically done by working with a warehouse line, which is a line of credit that mortgage bankers use. They use this money to buy your loan then they pay back that money to the warehouse line once they have sold your loan to your loan servicer.
More Freedom With Lender: With a mortgage broker, you are going to be dealing with a person that is bound by certain guidelines that were set for them by the lender they work with. Because of this, they are not in a position to waive certain requirements or qualifications. On the other hand, with a correspondent lender, they are flexible in the exceptions they can make. This makes the process much smoother and individualized.
Faster Process: We all know that the home buying process can be a lengthy one. However, with a correspondent lender, this process can be sped up. This is because these lenders handle their own underwriting and their loan approval is handled in-house. As such, you do not have to wait on poor or slowed communications because everything is done by the same group.
Better Options: Correspondent lenders can offer you many more options than other lenders. This is because direct lenders that do not participate in the secondary market are often bound to a limited set of options for their clients. With correspondent lenders, their only limitation is what investors would be prepared to purchase which can be a much more extensive list. In fact, the more investors that your lender is in business with, the more options will be transferred to you.
Looking for a Correspondent Lender in Washington DC?
Correspondent lenders are frequently the better choice for many home buyers. There are numerous reasons for this, but you can trust that you will have much more freedom when you work with a correspondent lender. If you are looking for homes in Washington DC, you deserve to work with a talented and competent lender that will give you the flexibility and options that you need. As the best correspondent lender in Washington DC, Gregg Busch believes in going the extra mile for our clients and providing the options that they need to get the mortgage that will suit them best. If you are interested in learning more about how we can assist you in your mortgage needs, please do not hesitate to contact us at The Busch Team today.