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When you speak of Real Estate Lenders, it can take in a lot of territory:
Banks, Savings and Loans, Credit Unions, exclusive Mortgage Companies, Mortgage Brokers and others. Your buyer
may use any of these sources for their mortgage needs.
Sources of Loans
Banks, Savings and Loans, Credit Unions: Their primary business is "Full Service" banking and offer mortgages as part
of their product line. This may be your small, local bank, a large national bank, or your Credit Union.
Mortgage Companies:
Their primary or exclusive business is the servicing of mortgages. Mortgage companies may be a separate entity,
or they may be a subsidiary of a large bank.
Mortgage Brokers:
Mortgage Brokers do not do the actual lending, but act as a middleman between the buyer and the lender. They can
do the loan shopping for the buyer, since they will represent several--or many--different lenders.
You: With certain
circumstances, you may either finance the whole mortgage by carrying a first mortgage or deed of trust, or do some
partial financing by carrying a second mortgage. In any such situation, be certain to consult competent financial
and legal consultants to determine what your liabilities may be.
Types of Loans
Conventional: One
of the most common mortgage types. The buyer may be putting as little as 5% down, although a 10% downpayment is
more common.
FHA (Federal Housing Administration): Contrary to many people's beliefs, FHA loans are not issued by the U.S. Federal Government
but are insured by them. Properties purchased under these programs must meet certain minimum standards and possible
loan limits. FHA-insured loans offer very low down payments (3 to 5 percent). An FHA appraisal of your house may
require that you do certain repairs or improvements to bring the property up to their minimum standards.
VA (Veteran's Administration):
To qualify for a VA loan, the buyer must be an eligible United States Service Veteran. If they qualify, one of
the major advantages of a VA loan is the ability to purchase a home with no down payment.
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