The Number of Mortgage Options Just Went Down

Life got a little tougher for mortgage brokers last week as a large wholesale lender was forced to close their doors. The fact is that the number of loans being placed by mortgage brokers is down substantially from last year. The number of major banks that had wholesale operations for mortgage brokers has dropped significantly. With the sharp drop in mortgages being written, many banks do not have the need for the mortgage brokers. These banks are driving the business to their in-house retail operations.

Is the mortgage broker still a viable option for homebuyers? YES, but they should be considered among all other lending options. Homebuyers need to consider more than one lender when shopping for a loan. Not all lenders handle all types of loan programs. More to the point, not all FHA approved lenders process all types of FHA loans.

Until the last year, interest rates were the primary determining factor in shopping for a loan. Now, with declining markets, the appraisal has taken on increased importance in the lending process. The amount of the down payment is also critical in determining which loan program might apply. For many homebuyers a local lender is often a better option when purchasing a home due to their understanding of the local market and “common sense” underwriting.

These topics are discussed at great length in my new book, “Homes Buyers and Mortgages.” Please visit my website at www.HomesBuyersandMortgages.com.