What is a Wholesale Mortgage Loan?

A wholesale mortgage loan is extended from a large lender to a smaller lender or independent financier. Retail borrowers do not have access to loans at these rates. They are offered because the retail lender borrows multiple loans at once from the wholesale lender and gets a discount. Even though a retail borrower like you cannot access these loans, you can use them to help pick a mortgage.

Access Wholesale Loan Rates

Wholesale loan rates are proprietary information, meaning they are not publicly listed and are not widely available to borrowers. However, a borrower can request to see wholesale rates from a loan agent. By viewing these rates, a borrower can see the company's markup on the loan. 

Fair Markup

All lenders will charge a markup in order to profit from their business. You should not be concerned over the fact there is a markup, but you should be concerned over the size of the markup. The markup should be commensurate with the risk of your loan. Higher-risk loans will be subject to higher markups through higher interest rates. If you know you are a low-risk borrower, a high markup may be a sign you are getting a bad deal on the loan.

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