Correspondent Lender
Definition of "Correspondent Lender"
A lender who delivers loans to another (usually larger) lender against prior price commitments the larger lender has made to the correspondent. Mortgage brokers sometimes evolve into correspondent lenders when they accumulate enough capital to acquire the credit lines needed to close loans in their own names. But correspondents continue to depend on commitments from other lenders to protect them against the risk that market prices will decline while they are holding loans.
Popular Mortgage Terms
A lender commitment to make a mortgage loan to a specified borrower, prior to the identification of the property that will be mortgaged. On a pre-approval, unlike a pre-qualification, the ...
Points paid by a lender for a loan with a rate above the rate on a zero point loan. For example, a lender might quote the following prices: 8%/0 points, 7.5%/3 points, 8.75%/-2.5 points. ...
A charge imposed by the lender if the borrower pays off the loan early. The charge is usually expressed as a percent of the loan balance at the time of prepayment or a specified number of ...
A rate lock, plus an option to reduce the rate if market interest rates decline during the lock period. ...
The monthly index is a ratio of monthly interest costs to total funds, expressed as a percentage. Annualized interest, the numerator, is calculated by multiplying the deposit balances at ...
A multi-lender Web site that offered borrowers the capacity to shop among multiple competing lenders. ...
On an ARM, the assumption that the value of the index to which the interest rate is tied does not change from its initial level. ...
Using a brokers time and expertise to become informed and creditworthy, then jumping to the Internet to get the loan. ...
Fixed rate Mortgage is a type of loan that maintains a specified interest rate for the lifetime (or maturity) of the mortgage.According to the Federal National Mortgage Association, ...
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