For those who’ve seen commercials for “Mortgage Matchup” these days, maybe throughout an NBA recreation, or on the court docket itself, you may be questioning what they’re all about.
That is really an fascinating query and reply as a result of they’re an organization that doesn’t work immediately with the general public.
But they promote on to shoppers on a regular basis, which isn’t a quite common association.
In addition they occur to be owned by the biggest mortgage lender in america, an organization often called UWM.
Fortuitously, I can totally clarify how their enterprise works so you can also make sense of all of it.
Mortgage Matchup Is an On-line Mortgage Dealer Listing Owned by UWM
- A web based mortgage dealer listing owned by wholesale lender UWM (nation’s #1 lender)
- Means that you can discover a native unbiased dealer to work with to get a mortgage
- Utilizing a dealer is the one method to apply for mortgage with UWM (can’t apply immediately)
- The web site additionally promotes the mortgage dealer enterprise mannequin vs. going retail/direct
In a nutshell, Mortgage Matchup is a web-based listing powered by UWM that permits you to discover and companion with a neighborhood mortgage dealer with the intention to apply for a house mortgage.
When you arrive on this web site, there’s a discipline to enter your tackle to “discover your native residence mortgage knowledgeable.”
However what’s unusual is a few of these consultants could not even work with UWM, which pays for and maintains the web site. I’ll converse extra to that in a second.
First, let’s speak about mortgage brokers and wholesale lenders.
The large distinction between a direct lender and UWM is that the latter depends upon mortgage brokers, that are third-party mortgage originators.
Brokers don’t characterize one lender, however somewhat have a number of lender companions the place they will ship your mortgage.
A mortgage dealer acts an middleman between residence patrons (or householders) and lenders.
Their job is much like a mortgage officer that works at a financial institution, however they aren’t captive to a single financial institution.
They’ve the power to buy your mortgage with all of their companions, then select the one they really feel is the most effective match.
This might be as a result of greatest pricing, the bottom mortgage price, a novel mortgage program, and/or the lender’s potential to shut the mortgage on time (or in any respect!).
A great analogy is an unbiased insurance coverage agent, who represents a number of insurers, not only one firm.
These brokers can store your price with 10 completely different insurers to search out the bottom price and greatest protection.
In the meantime, a captive agent who works for say State Farm will solely be capable of promote you a coverage from State Farm. That’s it.
So brokers have extra selection and the power to buy in your behalf, with out you having to elevate a finger.
Who Is UWM? And Why Did They Create Mortgage Matchup?
Now again to the proprietor of Mortgage Matchup. As famous, it’s owned by UWM, which is brief for United Wholesale Mortgage.
Because the title implies, they’re a wholesale mortgage lender (primarily based in Pontiac, Michigan), which suggests they aren’t consumer-facing.
So you’ll be able to’t go to UWM and apply for a house mortgage immediately. For those who tried, they’d let you know to discover a mortgage dealer who’s accredited to work with UWM.
Whereas which may sound unusual, that is simply the fact of the wholesale lending channel.
Not like retail or direct-to-consumer lending, the wholesale channel is B2B, so it’s solely accessible by way of an middleman, specifically a mortgage dealer.
UWM additionally simply so occurs to be the biggest mortgage lender within the nation by mortgage quantity, beating out its closest rival Rocket Mortgage.
Nonetheless, not like Rocket, they don’t do any retail or DTC lending. It’s wholesale solely, which is definitely fairly exceptional given they’re #1 within the nation.
However with the intention to drum up extra enterprise, they launched Mortgage Matchup to form of lengthen their attain with out coming into the retail channel immediately.
In different phrases, a shopper can go to the Mortgage Matchup web site, discover a dealer to work with, then apply for a mortgage at UWM.
However provided that the dealer recommends that they ship the mortgage to UWM. Brokers could have a dozen lender companions or extra, and will select a special wholesale lender.
So there’s no assure UWM would be the beneficiary, regardless that they’re those paying for the web site and the promoting (which may’t be low cost).
Nonetheless, UWM probably hopes to get a good chunk of this mortgage dealer enterprise in doing so.
Simply be aware {that a} dealer itemizing on the Mortgage Matchup web site doesn’t represent an endorsement or advice from UWM.
UWM Is Selling Mortgage Brokers by way of the Mortgage Matchup Model
Merely put, UWM is selling mortgage brokers by way of this web site, and not directly their very own firm.
They’re advocating for the wholesale channel, and inspiring shoppers to get a house mortgage by way of a dealer as an alternative of going direct.
There are many benefits to utilizing a dealer, specifically their potential to buy your mortgage with a number of lenders.
This might end in financial savings, with the Mortgage Matchup web site citing a examine that discovered working with a dealer can prevent $10,662 on common.
Whereas your mileage could fluctuate, which is why I all the time say to examine mortgage brokers too, these unbiased mortgage originators even have entry to extra mortgage packages.
They usually additionally are usually extra educated than captive financial institution mortgage officers, who could have much less expertise on account of restricted publicity to outside-the-box situations.
You may learn extra about banks vs. mortgage brokers for an in-depth comparability.
Why Doesn’t UWM Simply Enter the Retail Mortgage Enterprise?
This all begs the query, if UWM is the nation’s #1 mortgage lender, they usually’re already promoting to the general public, why doesn’t it simply enter the retail lending enterprise?
Couldn’t they make much more loans if prospects may apply immediately, whereas additionally sustaining their present enterprise?
In any case, they’ve an internet site, Mortgage Matchup, and the attain to accumulate a number of enterprise immediately from shoppers.
They usually’re already paying for the promoting. So why not? Properly, that’s not fully clear since we don’t know what UWM is considering.
But when I needed to guess, I’d say working wholesale solely enable them to economize on operational prices, worker overhead, and so forth.
As a result of they’ve a bunch of unbiased companions they work with, they will lower your expenses, even when these companions don’t ship them each mortgage.
They don’t need to pay them a wage or advantages, nor do they want extra workplace area.
Nonetheless, in the event that they maintain offering these companions with useful instruments to make their job simpler, whereas additionally providing aggressive pricing, they will doubtlessly get the most effective of each worlds.
And to date it seems to be working as a result of as I stated, they’re the high mortgage lender within the nation and don’t look like surrendering that place anytime quickly.
(photograph: Bernd Eckenfels)
Earlier than creating this website, I labored as an account government for a wholesale mortgage lender in Los Angeles. My hands-on expertise within the early 2000s impressed me to start writing about mortgages 19 years in the past to assist potential (and present) residence patrons higher navigate the house mortgage course of. Comply with me on Twitter for warm takes.
