California Home Loan Shopping: Comparing Mortgage Companies and Rates

Gil Mackey
LoanBiz Columnist

Article Rating , 4 out of 5 based on 1 votes

Mortgage companies differ widely in how they are structured and how they conduct business. Understanding how lenders operate can help you when shopping for your California home loan.

Mortgage Companies

Mortgage companies can essentially be broken down into two categories: mortgage bankers and mortgage brokers. Mortgage bankers can further be divided into banks and credit unions. These two offer similar mortgage services, similar mortgage rates, and both produce loans using their own funds.

Banks operate on a for-profit basis and may either service the loans themselves or sell them to other lenders. Banks often offer a limited line of products, but can feature low mortgage rates when they need to boost business for a short time period.

Credit unions are not-for-profit--they take the earnings on home loans and usually give it back to their members in the form of lower mortgage rates. Credit unions are very cognizant that they are lending out their members' money and as a result may underwrite more conservatively than banks.

Mortgage Brokers

Mortgage brokers are specialty businesses that do not make home loans at all. Instead, they serve as intermediaries working with a variety of wholesale lenders to help you find the specific loan product you need, such as a California home loan. The advantage of using a mortgage broker is that they often have a much wider variety of home loan products to offer and can usually work with homebuyers who have credit problems, unusual properties, or other issues to overcome.

California Home Loan Shopping 

It's important to check with a few mortgage companies and compare mortgage rates before you make your decision. Helping understand the differences between several mortgage companies can help you pick the best starting point. Bottom line: compare loans, compare mortgage rates, and take the time to get the best deal on your home loan that you can.

About the Author
Gil Mackey has been a writer and artist for the past twenty years. In addition to freelance writing, he writes for his local paper, and lives with his two children in Nevada.

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