Mortgage Company What it Means How it Works
Mortgage Company: What it Means, How it Works
What Is a Mortgage Company?
A mortgage company is a financial firm that originates and funds property mortgages. It markets itself to potential borrowers and seeks funding from client financial institutions.
Key Takeaways:
-A mortgage company is a lender specializing in originating home loans.
-Some mortgage lenders offer creative loan offerings, such as no origination fees or loans for those with less than stellar credit.
-Differentiating factors between mortgage companies include relationships with funding banks, products offered, and underwriting standards.
-It is possible to complete a mortgage application entirely online.
Understanding Mortgage Companies
A mortgage company underwrites and issues its own mortgages to homebuyers using their own capital. It specializes in mortgage products and does not offer other banking services.
Many mortgage companies operate online or have limited branch locations, which can lower costs.
While a mortgage company originates loans, it may sell the loan to a third-party mortgage servicing institution.
Special Considerations
The Equal Credit Opportunity Act prohibits credit discrimination based on various factors.
Why Work With a Mortgage Company?
Mortgage companies may offer incentives, such as dealing with borrowers with less-than-perfect credit or no origination fees.
What Do Mortgage Companies Do?
Mortgage companies specialize in mortgages, unlike banks and credit unions.
How Are Mortgage Companies Different from Mortgage Brokers?
Mortgage companies fund mortgages, while mortgage brokers serve as intermediaries between borrowers and lenders.
The Bottom Line
When shopping for a mortgage, consider companies specializing in lending. They may offer competitive rates, reduced fees, and work with borrowers with lower credit scores. Online mortgage companies provide more options than lenders with physical locations.
