How Mortgage Lender Programs Work

Lender Loan Basics

There are hundreds of different mortgage lenders available today.

You can get your mortgage from many different sources. This can include your current neighborhood bank, credit union, a mortgage lender, or a mortgage broker.

No source is automatically better than the other. You can compare offers from each one to see which is right for you.

Lender Types

Some lenders have a wide number of mortgage loans, while some mortgage lenders specialize in certain types of loans.

The lender that you are working with may not be able to provide you with the loan you are looking for. This is not necessarily because you don’t qualify for it. This may be because the lender just does offer the type of loan you are looking for.

Lenders also have different loan guidelines. What may be acceptable to one lender is not acceptable to another. Do not assume because one lender rejects you that another lender will not approve you. It is easy to get disheartened, but do not be.

There are specialized mortgage lenders that work with people who have bad credit.

Program Types: Lenders can have many different loan types. These can include from 30 year fixed, 1 year fixed, 3 year fixed, 7 year fixed, 10 year fixed, interest only, 40 year terms, 50 year terms, minimum payment options, and many other types of loans.

Lenders will also change their loan programs over time.

Some lenders specialize in certain types of loans and try to have better overall rates or more flexible standards for a particular lending niche.

Credit Type

Some lenders will work with all kinds of credit types. Some lenders will prefer to work with borrowers who have good or excellent credit.

Some lenders will focus on sub prime borrowers who have bad credit. These types of lenders do not have loan programs that are good for people who have good to excellent credit.

Loan To Value: Each loan type usually comes with a maximum amount of money the lender will loan against the value of a property. These caps can often be 80%, 90%, 95%, or 100% of the value of a property.

Some lenders will even go to 125% of the value of a property in a refinance. This is usually a full documentation type loan.