What Is a Wholesale Loan?

In a wholesale lending situation, a lender doesn't deal directly with borrowers. Instead, the lender relies on a loan broker to find them. Wholesale loans are typically extended at a lower interest rate than would be the case if the lender dealt directly with the borrowers, which is known as "retail lending." However, once the broker's fee is added on to the wholesale loan, the cost to the borrower is roughly the same as a retail loan.

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Reasons Behind Wholesaling


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But banks and other wholesale lenders faced the risk that outside brokers might sell risky but profitable mortgages for their own gain.

The other primary option for lenders is the wholesale mortgage market. Unlike retail markets, wholesale markets have an extra intermediary, the mortgage.

Wholesale Buying Vs. Retail Buying. Lending Money to Your Adult Kid by Mom.me You May Like. How to Buy Wholesale Direct.

How to Choose Wholesale Mortgage Lenders. Wholesale mortgage lenders are lenders who obtain wholesale rates on loans and then mark them up.

Wholesale vs. Retail. Sales tax is paid only once, by the end user or the last person to purchase a product.

A wholesale mortgage account executive represents a lender that buys loans from mortgage brokers and bankers. After loans are funded, lenders either.


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Source: ehow.com

Category: Credit

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