When you’ve seen commercials for “Mortgage Matchup” currently, maybe throughout an NBA recreation, or on the court docket itself, you is likely to be questioning what they’re all about.
That is truly an attention-grabbing 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.
Additionally they occur to be owned by the biggest mortgage lender in the US, an organization often known as UWM.
Thankfully, I can absolutely clarify how their enterprise works so you may 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)
- Permits you to discover a native unbiased dealer to work with to get a mortgage
- Utilizing a dealer is the one strategy 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 lets you discover and accomplice with an area mortgage dealer as a way to apply for a house mortgage.
When you arrive on this web site, there’s a area to enter your handle to “discover your native dwelling mortgage knowledgeable.”
However what’s unusual is a few of these consultants might not even work with UWM, which pays for and maintains the web site. I’ll communicate extra to that in a second.
First, let’s speak about mortgage brokers and wholesale lenders.
The massive distinction between a direct lender and UWM is that the latter depends upon mortgage brokers, that are third-party mortgage originators.
Brokers don’t signify one lender, however relatively have a number of lender companions the place they’ll ship your mortgage.
A mortgage dealer acts an middleman between dwelling consumers (or owners) and lenders.
Their job is much like a loan officer that works at a financial institution, however they aren’t captive to a single financial institution.
They’ve the flexibility to buy your mortgage with all of their companions, then select the one they really feel is one of the best match.
This might be because of the greatest pricing, the bottom mortgage rate, a singular mortgage program, and/or the lender’s potential to shut the mortgage on time (or in any respect!).
A very good analogy is an unbiased insurance coverage agent, who represents a number of insurers, not only one firm.
These brokers can store your fee with 10 totally different insurers to seek out the bottom fee and greatest protection.
In the meantime, a captive agent who works for say State Farm will solely have the ability to promote you a coverage from State Farm. That’s it.
So brokers have extra alternative and the flexibility to buy in your behalf, with out you having to raise 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 identify implies, they’re a wholesale mortgage lender (primarily based in Pontiac, Michigan), which implies they aren’t consumer-facing.
So you may’t go to UWM and apply for a house mortgage immediately. When you tried, they’d inform you to discover a mortgage dealer who’s authorized to work with UWM.
Whereas that may sound unusual, that is simply the truth of the wholesale lending channel.
In contrast to retail or direct-to-consumer lending, the wholesale channel is B2B, so it’s solely accessible through 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, in contrast to 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 as a way to drum up extra enterprise, they launched Mortgage Matchup to form of lengthen their attain with out getting into the retail channel immediately.
In different phrases, a client can go to the Mortgage Matchup website, 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 might have a dozen lender companions or extra, and will select a unique 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 doubtless hopes to get a good chunk of this mortgage dealer enterprise in doing so.
Simply observe {that a} dealer itemizing on the Mortgage Matchup web site doesn’t represent an endorsement or suggestion from UWM.
UWM Is Selling Mortgage Brokers through the Mortgage Matchup Model
Merely put, UWM is selling mortgage brokers through 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 through a dealer as a substitute 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 broker can save you $10,662 on average.
Whereas your mileage might range, which is why I all the time say to compare mortgage brokers too, these unbiased mortgage originators even have entry to extra mortgage packages.
And so they additionally are typically extra educated than captive financial institution mortgage officers, who might have much less expertise as a consequence of restricted publicity to outside-the-box eventualities.
You possibly can 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 might apply immediately, whereas additionally sustaining their present enterprise?
In any case, they’ve an internet site, Mortgage Matchup, and the attain to accumulate numerous enterprise immediately from shoppers.
And so they’re already paying for the promoting. So why not? Effectively, 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 permit them to save cash on operational prices, worker overhead, and so forth.
As a result of they’ve a bunch of unbiased companions they work with, they’ll lower your expenses, even when these companions don’t ship them each mortgage.
They don’t should pay them a wage or advantages, nor do they want extra workplace house.
Nonetheless, in the event that they preserve offering these companions with useful instruments to make their job simpler, whereas additionally providing aggressive pricing, they’ll doubtlessly get one of the best of each worlds.
And up to now it seems to be working as a result of as I stated, they’re the top mortgage lender in the country and don’t seem 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) dwelling consumers higher navigate the house mortgage course of. Observe me on Twitter for decent takes.