Primary Mortgage Lenders
A primary mortgage is one wherein borrowers can obtain a mortgage loan from a primary lender such as banks, mortgage bankers, credit unions, and mortgage brokers. Homeowners can directly contact primary lenders while shopping for a mortgage loan by contacting their local bank. A primary mortgage has the following advantages:
1. Low Closing Costs
Primary lenders are generally locally-owned banks and they take care of the underwriting process and credit analysis. Local banks prepare the paperwork and documentation in-house rather than going through a centralized unit out of the state.
2. Small Down Payments
The down payment for a mortgage is 20% of the price of the home, however, a borrower can put down less money while some lenders offer a 10% downpayment.
A mortgage lender is a mortgage bank or any financial institution that underwrites home loans. Lenders have specific borrowing guidelines that verify credit and the ability to repay a loan. They help to set the terms, interest rate, repayment schedule, and other key aspects of the mortgage. A mortgage lender has the following advantages:
1. Nominal Fees
Many lenders charge a small fee for their services and retail lenders provide the mortgages directly to consumers. Direct lenders originate their own loans, either with their own funds or borrowing them from elsewhere.
2. Short-Term Funding
Portfolio lenders often fund loans with their own money and don’t directly work with consumers, but originate fund and service loans. At times, a warehouse lender can help other mortgage lenders by funding their own loans in the form of short-term funding.
Subprime Mortgage Lenders
A subprime mortgage is one that is issued to a borrower with low credit ratings. The lender views the borrower as having a greater risk of defaulting on the loan which is why a prime conventional mortgage isn’t offered. Lending institutions often charge interest on a subprime mortgage at a much higher rate than on prime mortgages to compensate for the greater amount of risk. The following are advantages of subprime mortgage lenders:
1. Ease of Approval
Usually, banks or lenders turn down borrowers who have defaulted on loans in the past or have outstanding debt on their balance sheets. In the subprime loan market, borrowers who can’t receive loans elsewhere can obtain money.
Subprime loans are perfect for people who need to pay off other debts as outstanding debts harm a borrower’s credit score. With a low credit score, a borrower can receive a subprime loan, pay off existing debt and then work to make payments on the subprime loan on time. As a result, a borrower can fix his/her credit score.
Blake Mortgage provides you with the best client-centric comprehensive schemes for all your finance-related queries and is one of the best mortgage lenders in AZ. blakemortgage.com has worked with multiple communities in Arizona, Glendale, Chandler, Gilbert, serving mortgage loans and financial advice to homeowners. Their comprehensive website helps you understand everything you need before taking a loan. Make sure you reach out to them before applying for a mortgage loan to buy your dream house.