Buying a home and securing a mortgage in today's market is a bit more complicated than it was a generation ago. Instead of driving to your local bank to speak with a loan officer, the 21st-century mortgage is available in an increasing number of avenues, and it is important to have at least a basic understanding of the marketplace so that you can make the best decision. NerdWallet has a great primer on mortgage providers that can be a helpful guide, clarifying the three new “alternative” (alternative to commercial banks) types of mortgage-based business models:Marketplaces: Like MortgageBite, these are today’s mortgage “concierge” services, who are set up to provide consumers with fast and accurate information about what mortgages they are potentially eligible for, based on preliminary information you provide. The company then provides a list of lenders offering those loans, generating a “lead” for that company, for which they receive a fee. Benefits include not having to waste time calling hundreds of potential lenders to find the best deal. Having that helping hand to walk you through the initial process and hand you off to a trusted mortgage lender is an increasingly popular option, both for the busy and cost-conscious consumer.
Online Lenders: So you want to cut out the middleman, and go for high efficiency? Then an online lender like Quicken or Loan Depot might be what you are looking for. While you can be approved in a matter of minutes, you’ll have to do the comparison shopping on your own.
Non-Bank Lenders: If your credit isn’t perfect, a non-bank (no deposits) lender could be the answer. Since the financial crisis, traditional banks have done their best to reduce their role and exposure in the mortgage market, opening up opportunities for this new breed of lenders. They range from small branches with a handful of employees to national networks with thousands of originators.
Regardless of which direction your mortgage journey takes you, today’s consumer has more options than ever, which means more competition, better pricing and improved service!