The Major Types of Denver Mortgage Lenders Explained
When you’re considering buying a home with the help of Denver mortgage lenders, you’ll a few different options as far as the type of lenders that are out there. Finding the right Denver mortgage lender could be the difference between a smooth and quick home buying process or a drawn-out and expensive one. Before deciding from the countless Denver mortgage lenders out there, check out this quick guide to the various types of lenders.
What is a Denver Mortgage Lender?
What is a mortgage lender in the first place? Essentially, a mortgage lender is a company or bank that lends you money to purchase or refinance residential real estate. Commercial banks, Credit unions, mortgage bankers, and mortgage brokers all fall into this category. Different lenders will often have different requirements to qualify, and some may accept loan types that others won’t.
Banks, Credit Unions, and Savings & Loans
All of these institutions are also “depository” companies which means that people keep or deposit their money with them and do their banking with them. Denver Mortgage lending is not their primary focus. Because it isn’t, their employees, generally, are not as experience with mortgage lending and usually the service a client receives from these entities tends to be somewhat compromised. In addition to less experienced employees, these institutions also tend to be more conservative on who they will give loans to. If you are not an excellent credit risk, they are unlikely to approve financing for you.
When you work with a Denver mortgage broker, there’s an extra step involved. Since brokers do not have their own funding source for your loan, they have to go to wholesale lenders to fund their mortgages. The wholesale lenders are different companies that have different products and underwriting policies that the brokers must learn and understand. The upside of working with a broker is that it can offer a wider range of flexibility as far as the access to a wide variety of loan products and underwriting standards. The downside is that it can take longer to get loans approved and closed, and the broker can lack some control over timelines that a client may be focused on.
Another obvious option of a Denver Mortgage Lender is a Online Lender. Online lenders like Rocket Mortgage, Amerisave, LoanDepot, and Guaranteed Rate are all mass-production mortgage facilities. They usually offer a “conveyor-belt” process to getting a mortgage loan. There are many different people along the conveyor-belt that clients end up working with and talking to, usually on a 1-800 phone number. Each one of these employees only knows their limited part of the process and it is very difficult for you, as a client, to get a good overview of what is happening with your loan. This can create difficulty when it comes to timelines and contracts. Particularly when you are buying a house, your purchase contract requires you to adhere to fairly strict timelines. Not doing so can cost you money or completely cost you getting the home. This is the biggest reason why most experienced real estate professionals advise their clients to not use an Online Lender.
5280Lend.com is a subsidiary of Universal Lending and we are primarily a Mortgage Banker. We exclusively provide financing for the purpose of purchasing and refinancing residential real estate. We have our own funds and underwriters here, locally, in Denver. Our employees are all very experienced in the work of providing loans for Colorado Homeowners and understand the process extremely well. Since there are many different parties involved in the process of buying a refinancing houses, it is important to have good relationships with those various parties. Appraisers, real estate agents, title companies, and credit companies (www.advcredit.com) are just of few of the 3rd party vendors that 5280Lend and Universal Lending have established relationships with and pride ourselves on the depth of those relationships. Other examples of Mortgage Bankers in Denver are Cherry Creek Mortgage, Fairway Independent Mortgage, and Guild Mortgage.
Hard Money Lenders
When you think of Hard money lenders, you might think of a “thumb-breaker,” or your cousin Vinny. All joking aside, hard money lenders usually only have one requirement for giving someone a loan: that there is enough equity in the property. It usually needs to be 30% or more equity in the property for them to consider doing a loan. These are very high-interest rate and high-cost loans. These loans are typically only used in rare instances like property flipping, foreclosure situations or bankruptcy situations.
Work with the Best Denver Mortgage Lenders at 5280Lend.com
Whether you’re a first time homebuyer in Denver or it’s your next round, knowing a bit about the various types of Denver mortgage lenders can help you make a well-informed decision before purchasing a home or refinancing one you already own. If you’re still stuck, consider working with 5280Lend.com. We can help you understand how much you qualify for, what to expect throughout the home buying process, what your potential down payments or closing costs may be, and more.