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Technically speaking, a real estate mortgage is the amount of money that a financial institution or a bank lends you to buy a house or any other residential property on the condition that if you fail to pay back the money then the lender can have the legal rights to the property. In the olden days this was no problem as the money could have been lent by any bank which had some extra money lying in storage container vaults. But these days the matter has changed and the whole real property mortgage is regulated by some federal and government agencies that also provide the money for the loan. Moreover the credit rating of the borrower is also a matter of concern and this decides the availability of the loan.
The first step for any real estate mortgage is the application process. Usually this follows a choice of the property you wish to buy. Sometimes the agent who arranges the property transaction also arranges for the mortgage and takes care of the loan. The lender who you are taking the loan from does all that is necessary and process the application and makes all the verification. This follows with the actual receipt of the loan and ownership of the property. The mortgage payment is made after this and for the period agreed upon between the lender and the borrower. This is not usually paid back to the agency that has arranged for the loan because this agency is not always the provider of the money. So the repayment you make is actually made to the financing agency through these people who processed your loan application.
A real estate mortgage is supplied by a mortgage lender. These lenders can be the mortgage bankers, mortgage brokers and wholesale lenders. The mortgage bankers are so big banks that they lend money to the financial institutions and the jumbo loan investors. The banks usually do not directly service the loans they give to the borrowers but they have the wholesale lending divisions to take care of these. The size of the mortgage bankers may vary but the purpose and mode of functioning determines their status. Then comes the mortgage brokers who interact with the wholesale lending institutions with the intension of brokering the loans they originate. These wholesale lenders are the institutions that lend money for loans to the mortgage brokers at a cheaper rate than their retail units. The mortgage brokers rely largely on these bodies for their needs.
There are other lending bodies who arrange for the real estate mortgage like the portfolio lenders, direct lenders, correspondents and credit unions. They all have specification for their nomenclature. The portfolio lenders are those institutions that originate the loans and have their own money to lend. They do market the loans but that has certain conditions after fulfilling which the loans get marketable. Direct lenders fund their own loans and can vary in sizes from the tiny to the gigantic depending upon their wealth. Lastly the question comes which is the best place to get the real estate mortgage from. There is no scale on which you can judge between the different types of lenders to finalize where you will apply for the loan. The best way to decide upon it is to look at the track record of the agencies and the loan officer. The best in the business should be the best choice irrespective of the type of institution.
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