In recent years, non bank mortgage lenders have seen a significant increase in their market share. This trend is expected to continue in the coming years as more and more consumers turn to these lenders for their home financing needs.
What are Non Bank Mortgage Lenders?
Non bank mortgage lenders are financial institutions that do not have traditional bank charters. They are not regulated by the Federal Reserve and do not have access to the same funding sources as traditional banks. However, they are still able to provide mortgage loans to consumers.
These lenders are often more flexible than traditional banks when it comes to their lending criteria. They are able to offer loans to consumers with less than perfect credit or those who do not meet the strict underwriting standards of traditional banks.
There are several reasons why non bank mortgage lenders are gaining market share:
- Flexibility: As mentioned earlier, non bank mortgage lenders are often more flexible than traditional banks when it comes to their lending criteria. This allows them to offer loans to a wider range of consumers.
- Speed: Non bank mortgage lenders are often able to process loan applications quicker than traditional banks. This is because they have less bureaucracy and are more nimble.
- Technology: Many non bank mortgage lenders have invested heavily in technology. This has allowed them to streamline their processes and offer a more efficient and convenient service to consumers.
What are the Risks of Using Non Bank Mortgage Lenders?
While non bank mortgage lenders offer many benefits to consumers, there are also risks associated with using them:
- Less Regulation: Non bank mortgage lenders are not regulated by the Federal Reserve. This means that they are not subject to the same rules and regulations as traditional banks. This can make them riskier for consumers.
- Less Security: Non bank mortgage lenders do not have the same level of security as traditional banks. This means that they may be more vulnerable to cyber attacks and other security breaches.
- Higher Interest Rates: Non bank mortgage lenders may charge higher interest rates than traditional banks. This is because they do not have access to the same funding sources as traditional banks.
The Future of Non Bank Mortgage Lenders
The future looks bright for non bank mortgage lenders. With more and more consumers turning to them for their home financing needs, their market share is expected to continue to grow.
However, it is important for consumers to do their due diligence when choosing a non bank mortgage lender. They should research the lender’s reputation, read reviews from other consumers, and compare rates and fees before making a decision.
Conclusion
Non bank mortgage lenders have continued to pick up market share in recent years. This trend is expected to continue in the coming years as more and more consumers turn to these lenders for their home financing needs.
While non bank mortgage lenders offer many benefits to consumers, there are also risks associated with using them. It is important for consumers to do their due diligence when choosing a lender.
Overall, non bank mortgage lenders are a viable alternative to traditional banks for consumers who are looking for more flexible lending criteria, quicker processing times, and a more convenient and efficient service.