Types of Wholesale Mortgage Lenders

Once you have started looking for a mortgage you are likely to hear and see new terms that you have no idea what they are. A wholesale mortgage lender is probably one of the ones you have never heard of. When we, as consumers, think of wholesale we tend to think of places like Costco, Price Club or Sam’s Club, thinking to ourselves that we can buy at better prices, so maybe we should look into this.

Mortgage brokers are the people that sell loans for wholesale lenders. Wholesalers do not have the ability to deal directly with a borrower. The retail lender uses the daily market rate set by the wholesaler to sell you the loan, with a mark up to cover his or her cost of business.

The market fluctuations are the data the wholesale lender sets to deliver the daily price. Mortgage brokers usually access wholesaler lists on the internet through password protected sites. There are some companies that don’t password protect, but they realize that they average consumer will not be able to interpret the data, and would be best used as leverage when trying to obtain the best loan.

Wholesale lenders provide data that needs to be professionally reviewed. To understand the information takes a great deal of effort if you desire to use it for obtaining a loan. Finding a broker is much easier than going through the hassle of deciphering the figures.

Asking a broker about the wholesale figures would help in your negotiation for a loan. Finding out the basics about mortgage loans would be your first step. Approaching the broker with a well researched statement such as, “I would like your assistance in obtaining a price lock on a fixed rate mortgage with a 20 year term, can you help me?”

A mortgage lender must do a great deal of work to secure the best loan for your needs; this entails a great deal of work. It begins with advertising for customers, running credit and employment checks, counseling and advising borrowers, researching insurance and filling out large amounts of paperwork to make sure your loan is processed correctly. The mark up from wholesale to retail allows for compensation of this work.

Perhaps you have secured a working relationship with a wholesale lending company. You won’t actually be working with wholesale cost; this is not a deception, just a marketing tool. Companies can have different divisions and you would be working with the retail lending division.

Basically it is like working with a distribution center. This would be similar to the experience of going to your local store to purchase something. This is much simpler than going to a 100,000 square foot building and trying to locate a single product while dealing with forklifts moving products etc. The distribution center would not have the ability to sell directly to you either, if they could it would take quite a mark up to do so. Knowing what is out there and how to work with the terms can give you the negotiating tactics that you will need.