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What is a Wholesale Mortgage Lender?

We all know the role of the real estate agent. Real estate agents are there to help people find the house of their dreams. They do the footwork to find homes that clients may like, show the homes, and prepare the documents, and, once the clients find their dream home, introduce them to a mortgage broker. The broker has access to many loan product options and could save them thousands of dollars. How? By contacting a wholesale mortgage lender!

What is Wholesale Lending?

Mortgages can be split into two categories, retail and wholesale. Brokers bring mortgage loan applicants to wholesale lenders to fund mortgage loans. Wholesale lenders have the underwriting power and the funds to lend to potential borrowers. The lenders are responsible for lending within current industry guidelines and for supporting the clients. The brokers are responsible for keeping communication open between the two.  

Retail Lenders (Banks and Credit Unions) vs.Wholesale Lenders

Traditional retail loans are loans that clients apply for from a bank, the bank approves the loan, and the clients pay payments back to the same bank. Wholesale mortgages, although they come from a bank, do not deal with consumers directly. These loans begin when a lender has an amount of money they would like to turn into mortgages. They, however, only offer it through third parties: brokers, banks, or credit unions rather than to the borrowers themselves. The wholesale lender may or may not service the loan, but their name will be on all the documents. 

The lenders will decide on the terms for the money they loan out and let the third parties know. It is then the job of the brokers, banks, and credit unions to find a borrower for the loan. After closing, the wholesale lender will usually sell their loans on the secondary market. Their money pool is refreshed, and they now have funds to create more loans. 

What are the Advantages of Having a Wholesale Mortgage Lender?

  • Wholesale loans are known for having competitive rates.
  • Many wholesale lenders have looser lending requirements. 
  • Brokers deal with so many lenders that, even if they cannot find someone near to fund their clients or they don’t have many lenders to choose from, they are typically able to find a wholesale lender in a different location. 
  • Although it can cause communication to be slow at times, you don’t have to work directly with the lender.
  • Although there may be additional fees, working with a broker and a wholesale lender will save you lots of money in the end.

Where Do I Find Wholesale Mortgages?

Mortgage brokers assist clients in finding the best loan terms and best interest rates for the purchase of a commercial or residential property. A client must go through a mortgage broker to get a wholesale loan, and, over time, brokers develop a relationship with some of the better lending institutions. 

Choose Bluepoint Mortgage as Your Wholesale Lender

Wholesale mortgage lenders, like Bluepoint Mortgage, do not necessarily have to be near you to lend to your client. In fact, we have offices in 30 states across the nation! Contact us to get the best loan for your client. We are here to support you and give your clients a loan that fits their needs.

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