If you talk to a loan officer, he/she will probably express as the lender they work for is the best and will give a list of reasons why. If you meet the same loan officer after some years and he works for a different lender, he will give you a list of reasons why the present type of lender is better. Real estate agents have differing opinions and, as a group, the realtors opinions have changed over time. In the past, most realtors often recommend portfolio lenders, because they always almost closed the deal. As time passed, mortgage brokers and mortgage bankers became more important, and agents switched along with the changes.
- Portfolio lenders: The portfolio lenders are usually banks and savings & loans institutions. These are tend to originate the loans for their own portfolio, but not for sell them in the secondary market. It is easy to qualify for a portfolio loan. They are often a lender of second resort for unqualified people for a fixed rate loan. The portfolio lenders can also serve as niche lenders, this is because of meeting more standardized underwriting guidelines of a mortgage is less important than certain things.
- Banks and savings & loans: The banks and savings & loans major strength is that easily recognize their name. Banks and savings & loans often operate as the portfolio lenders, but as lending world has changed, most of them also operate as mortgage bankers and in sometimes as brokers.
- Mortgage bankers: Normally, mortgage bankers are much better at promoting first time buyer programs, cooperating with the state and the local governments. These programs will have somewhat lower interest rates and costs than current market rate. To qualify for these programs, income must usually fall below a average (median) for the area and you must not have owned your residence for last three years. The mortgage bankers may have the problems just because they are too big or they may operate like as well oiled machines.
- Mortgage brokers: Generally, wholesale lenders use the mortgage brokers as their loan officers. Mortgage brokers also learn the hot points of various wholesale lenders and can handpick lender for borrower which may be unique in some way. The broker will be able to submit loan to either a mortgage banker or a portfolio lender. Another advantage with mortgage broker is, if loan gets declined for some reason, they simply repackage loan and submit to another wholesale lender.
Most often realtor will direct you to a specific loan officer, that who has a track record of reliability and service or a loan officer that who works for a specific lender affiliated with their real estate office. It is more important to choose good loan officer, rather than the institution. The loan officers have two jobs, one is to be as your advocate in getting the loan approved, and the other is quality loans deliver. As for the lending organizations, each type of lender has weaknesses and strengths. Quality within each office or branch can vary, depending on the support staff, loan officer, and a variety of other factors.