The economy in the United States has slowly begun to pull out of the recession. Unemployment numbers are down once again, the stock market is on the rise, and more and more people are finding themselves with disposable income. As this happens, more and more people are beginning to consider purchasing a home again. During the heart of the recession, homes no longer seemed like the great investments that they once were. Home values tumbled overnight and many people believed that they wouldn’t come back again. So many people lost thousands of dollars on their home that many pledged never to purchase again, for fear of the home depreciating over time. However, it appears that homes once again are beginning to appreciate in value. In some parts of the country this is more true than others. In Denver, for example, home prices are once again on the rise. The housing market is a fickle beast, so it is crucial for people considering the purchase of a home to understand the market trends as best as they can. In addition to understanding market trends, it is important for people to understand other aspects of purchasing a home, such as correspondent lending.
One of the many reasons why people don’t attempt to purchase a home is that the home purchasing process can feel a little bit overwhelming. For example, many people simply don’t understand the steps it takes to take out a loan, purchase a home, and pay their mortgage. Without the right kind of financial adviser, many people feel like they are reading another language when they look at loan agreements. For this reason, it is crucial to gain an understanding of what exactly it is that certain people do. This better understanding will allow people to take out loans with more confidence. It also enables them to pay their loans back in a more efficient way, because they understand just exactly how it works.
Correspondent lending is a specific type of lending practice. A correspondent lender is a person who functions as something in between a broker and a wholesale lender. A broker, for example, is an individual that locates potential borrowers, counsels them, and helps them with their loan application process. In addition, a broker gets them into touch with wholesale lenders. Wholesale lenders are the people who actually lend the physical money to the borrower. When a person, then, is paying their mortgage, they are paying that money to the wholesale lender.
A correspondent lender is a person who functions in between these two. They can help potential buyers with the application process, they can help them with the various other paperwork, and they can counsel them through the process of getting a loan. In addition to this, they can actually take out the loan themselves and give it to the borrower. However, they are not actually putting their own money down, because they end up selling the loan to a wholesale lender. Thus, they don’t take on the risk that wholesale lenders do, but they basically do the same things.