Independent Mortgage Lenders

Independent mortgage lenders are simply private companies that issue mortgages.

The main difference between independent mortgage lenders and the mortgage finance giants Freddie Mac and Fannie Mae is that independent mortgage lenders are private companies. Freddie Mac and Fannie are government chartered corporations set up by Congress to make sure that mortgage financing is available to all citizens.

Independent mortgage lenders are private companies that are in business to make money. The major difference for the average person is that the independents don’t have as many restrictions on their operations. They can offer a wide variety of products that Freddie Mac and Fannie Mae can’t.

Independent Mortgage Lenders Offerings

Many independent mortgage lenders or third party lenders offer a wide variety of products other lenders don’t. Quite a few independent mortgage lenders offer Adjustable Rate Mortgages (ARMS) and other products beyond standard 30 and 40 year mortgages.

Some independent mortgage lenders are also willing to issue mortgages to those traditional lenders won’t. For example many independent mortgage lenders issue sub prime mortgages which are specifically designed for people with low incomes and bad credit. Others may specialize in mortgages in one area of the country or mobile home mortgages.

Another difference is that many independent mortgage lenders offer their products directly to the public. They sell mortgages online and through brokers and actively promote their products. Many of them advertise their mortgage products heavily.

Independent Mortgage Market

The independent mortgage market has shrunk in recent years because of the financial meltdown but it is still large.

One big difference between independent lenders and other lenders is the way in which they get the money they lend to homeowners. Instead of getting financing from the government these lenders will get financing from the market. They may sell debt instruments called commercial paper through the international markets in London for example.

Some independent mortgage lenders also work only with investors and commercial buyers. These lenders may self finance or back the mortgages themselves.

Third Party Lenders

Independent mortgage lenders who work with commercial mortgages are called third party lenders. These lenders specialize in commercial mortgages and are often interested in high yield investments.

Third party lenders may make mortgages to commercial customers available fairly quickly but they charge higher fees and interest rates. 

Many third party lenders are willing work with businesses that normally can’t get mortgages. This can include new businesses, speculative businesses and businesses with histories of bad credit. Third party lenders are willing to work with these lenders because mortgages made to them can be highly profitable.

Locating an independent or third party mortgage lender can help you get a mortgage. Even if you have bad credit or a low income.