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Loan Process Information

Institutional lender: An individual or institution such as a commercial bank, savings and loan, or mortgage company that lends and invests money for customers. Institutional lenders are the leading source of real estate loans.

Loan officer: An authorized representative of a lending institution who is empowered to act on the lender's behalf, within specified limits.

Mortgage banker: A company such as a commercial bank that uses its own money to provide loans for the purchase of real estate. Like mortgage brokers, mortgage bankers match lenders to potential borrowers. Mortgage bankers may also service the loan, meaning they'll collect your monthly payments, but they're more likely to sell their loans to investors on the secondary market, such as Fannie Mae, Freddie Mac, or insurance companies.

Mortgage broker: An individual or company that matches lenders to loan applicants who meet the lender's criteria. Mortgage brokers, who are paid by the lender, don't use their own funds; they do accept loan applications, process the paperwork, and present the files to another institution (typically a bank or savings and loan), which then underwrites and processes the loan.

Other Players

Inspector: An individual who's hired to inspect a home for structural defects and for potentially toxic substances, including asbestos, radon, pests, or the presence of lead in paint or water. Structural inspections aren't required by law, but they're highly advised to protect you from unexpected costly repairs. Include a clause in your offer stating that purchase is contingent upon an inspection of the house and property. Not all inspectors are licensed; if you do use an unlicensed inspector, look for an engineer, architect, or other specialist who has structural experience. Inspections are usually conducted within two to five days after the buy/sell agreement is reached.

Title company: The firm that ensures that the property title is clear (otherwise known as title insurance) and sometimes handles other closing matters. Title insurance essentially guarantees that you actually get what you paid for. The agents or your escrow company may have a preference for a certain company. This isn't generally cause for concern, but they should disclose any relationship to the buyer.

Additional Related Information


Importance of Home Inspection
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