What Is a Mortgage Bank?
Mortgage banks are often one and the same as traditional brick-and-mortar banks, such as the one where you have your checking account. However, unlike many lenders you'll see described in this book, mortgage bankers are unique because they not only originate (handle applications) for their loans, they also fund them. (That is, they have a direct conduit to the money.) Most every other lender is a purely a middleman, dealing with other mortgage bankers or independent sources of money at wholesale.
There are a variety of online mortgage calculators you can use to figure out what a particular mortgage choice will cost you, but a good one to try comes from the Mortgage Bankers Association, online at
Because mortgage banks are a major entryway to funds, does that mean they'll deliver the best deal? Sometimes, but not always. To a degree, as mortgage brokers and other competing originators have entered the market, traditional banks have had to get more competitive with regard to rates and fees.
Chapters 4 and 5 discuss the main credit components that make people effective borrowers. Because major banks, also known as money center banks, have ample access to capital, they can be fairly choosy about whom they lend to on a business and consumer level.
That's why it's essential to manage your credit carefully over a lifetime. It won't hurt to manage your relationships with bank staff, either, so you can informally ask people you get to know key questions before it comes time to borrow. Keep the following queries at the ready:
Are there any products and services within your bank (certain types of checking, savings, or cash-management accounts) that might make me a better candidate for a mortgage loan when the time comes?
If I wanted the best rate on a loan within the next six months, what would my minimal credit score have to be?
I know you can't exactly predict the course of interest rates, but are you getting any read from your bank's economists on where longerterm rates might be heading?
Are you offering any special programs or opportunities for firsttime homebuyers?
I've been a customer of my bank for years. I'll get a great deal on a mortgage, right?
Well, at the very least, hopefully you'll get quick service. Today, lenders tend to take a less personality-driven approach to lending decisions, thanks to credit data in all its forms. Their loyalty isn't what it was, which means yours shouldn't be, either. Always check multiple sources for a mortgage.
