Choosing US Mortgage Lenders

When you are in the process of trying to buy a home, or any piece of residential or commercial property for that matter, one of the things that you are considering is how to choose a mortgage lender. Unfortunately, that is the wrong way to go about the dilemma. While you may wish to use one lender over another, the reality is the lender chooses you. Based on your credit history and credit score in addition to how much money you have for a down payment, you may not meet the requirements of all conventional mortgage lenders. Many borrowers start with the top five or ten lenders when applying for a new mortgage loan, but there are other options should this fail.

2010 Top Five Conventional Mortgage Lenders

The top five US mortgage lenders for originating residential mortgage loans in the first half of 2010 are Wells Fargo, Bank of America, JP Morgan, GMAC and Citigroup. This is exactly the same five that were in the top positions throughout the entire year of 2009, with one slight deviation. GMAC and Citigroup did a flip-flop for positions four and five. In 2009 Citigroup was in fourth place with GMAC just behind them in fifth place. For the first half of 2010, GMAC was in fourth and Citigroup fell to fifth. It will be interesting to see the positions when the rankings are in after the end of the year.

When the Top Five Refuse You

Whether you are looking for residential mortgage lenders or commercial mortgage lenders, there will be times when you will not meet their criteria and they will deny the loan. Most often this is based on an insufficient credit score, but there may be other factors as well. Perhaps the amount of the loan is more than the market value of the property among other factors that would contribute to a denial. In cases such as these, the borrower is free to apply to private mortgage lenders, often referred to as mortgage lenders for bad credit. There are a couple of very good ways to go about finding this type of lender. The first way would be to consult mortgage brokers in your local area or online and the second way would be to do an internet search for private mortgage lenders.

Private Mortgage Lenders Things to Consider

Although there is a lot of controversy regarding private mortgage lenders because mortgage rates tend to be higher than conventional lenders, there is something that you should consider. For one reason or another you did not qualify for a conventional mortgage loan and this subprime, private mortgage lender, is willing to take a chance on you. Because of the higher risk, that lender is asking higher mortgage rates proportionate to the amount of risk involved. Higher rates may make the difference between buying that home or not if you do not qualify for a conventional loan. Quite often homeowners need to take out a home equity loan for various reasons, including financial difficulties, and second mortgage lenders may be limited to private lenders. Again, if this is the only option open to you, paying higher mortgage rates may be the least of your worries.

In the end, if you are looking for a first or second mortgage on residential or commercial property, your first plan of action is probably to apply to the top US mortgage lenders. Should that fail, there are other avenues open to you that may take a little legwork on your part, or the part of mortgage brokers you contract with, but private mortgage lenders may be a viable solution. If you are limited to higher mortgage rates, make sure to take a good look at your finances to make sure you are not biting off more than you can chew. Ethical private mortgage lenders can help you make that determination. After all, they stand to lose if you do, so your success is their success.