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Independent Lenders Play a Big Role in Home Mortgages

Independent Lenders Play a Big Role in Home Mortgages

As a Denver mortgage broker always on the lookout for the best deals for our clients, we often work with independent lenders to secure home loans. Independent lenders fill the gap left by banks and credit unions. Now, a study confirms what we have known about independent lenders all along: they play a crucial role in the home mortgage market.

The study comes to us by way of Pew Charitable Trusts. It is based on Pew’s analysis of data from the Home Mortgage Disclosure Act relating to mortgages made between 2018 and 2022. Needless to say, we find the data very encouraging for both independent lenders and private mortgage brokers like us.

What the Study Reveals

Pew’s overall assessment is that independent mortgage lenders play a crucial role in financing residential properties. More specifically, they have finally supplanted banks and credit unions as the primary source of home mortgages under $150,000. For the purposes of the study, mortgages under that amount were considered ‘small’ mortgages.

Here are a few more notable things the study revealed:

  • 19.7 million total mortgages were issued between 2018 and 2022.
  • 62% were originated by independent mortgage lenders.
  • 1.5 million small mortgages were issued during the same period.
  • 53% were originated by independent mortgage lenders.

Credit unions, smaller community banks, and large banks originated 10%, 21%, and 15% of the total mortgages respectively, during the 2018–2022-time frame. What do all the numbers mean? They mean that independent lenders are gradually originating a larger number of the total mortgages issued in the U.S. That is good.

Independent Lenders and FHA Mortgages

The Pew study has even more good news to offer. According to their data, independent lenders now originate a larger share of FHA mortgages – at a rate of about 89%. Those mortgages go to low- and moderate-income buyers who simply cannot afford more expensive bank loans.

It is no coincidence that the lion’s share of first-time buyers falls into that category. Buyers in their 20s and 30s do not have as much purchasing power as their older counterparts. They are more likely to qualify for FHA loans. That means they are also more likely to get their mortgages from independent lenders.

The Best Deal for You

We couldn’t be more pleased with the results of the Pew study. It confirms our support for independent mortgage lenders here in Colorado and across the country. Independent lenders help us fulfill our mission: finding the best possible deal for each and every client.

If you were to come to Mortgage Maestro for help in arranging a mortgage, you would expect us to look high and low for every possible option. You would expect us to crunch the numbers and present you with your best options for a home loan. Whether you were interested in a first-time buyer’s mortgage, a VA loan, etc., you would want the best possible deal.

For the record, one of the advantages of working with a mortgage broker is having access to multiple lenders. Rather than visiting banks and credit unions all over town to see what they have on offer, you go to a single mortgage broker who does the legwork for you. Best of all, a mortgage broker gives you access to products not available through banks and credit unions.

Our hat is off to independent mortgage lenders who work extremely hard on behalf of their customers. We have known for a long time that they play a huge role in the mortgage market. Thanks to Pew, we now know just how important their role is.

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