What is a Mortgage Company?

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  • Written By: Luke Arthur
  • Edited By: Heather Bailey
  • Last Modified Date: 18 August 2019
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A mortgage company is a business that provides loans to individuals who wish to purchase a home. Mortgage companies typically have access to a network of lenders and can help individuals find sources of financing. There are a number of products someone could access from a mortgage company, including a fixed-rate mortgage, an adjustable-rate mortgage, and an interest-only mortgage. In most cases, the mortgage company is compensated through the closing costs of the loan.

Most individuals who purchase real estate utilize a mortgage loan to do so. Since making a real estate purchase involves a large amount of money, most people do not have enough in savings to make the purchase. By using a mortgage, the individual can make the purchase now, live in the property, and make installment payments over a long period of time. In most cases, a mortgage will last as long as 30 years. The mortgage company can help the individual come up with the necessary funds for the purchase of a property.

Many mortgage companies work in conjunction with other lenders. The mortgage company will act as an intermediary between the individual and the lender. The individual will specify what type of loan he or she is after. The mortgage company will then set out to find the appropriate loan for the home buyer. The company works in conjunction with mortgage lenders to sell loans to these individuals.


A home buyer can typically find many different loan products at a mortgage company. One of the most common types of loans is a 30-year fixed-rate loan. This allows the individual to borrow a fixed amount of money and pay a fixed amount of interest over the life of the loan. The mortgage payment will remain the same for the entire 30-year term.

Another popular type of loan is an adjustable-rate mortgage. With this type of loan, the interest rate is tied to a financial index and can move up and down. This results in a changing monthly payment for the borrower.

In some cases, mortgage companies will sell interest-only loans to the home buyers. These loans allow the buyer to pay only the interest on the loan each month. At the end of the loan, the buyer will then have to pay a balloon payment to pay off the loan balance.

Regardless of what product is sold to the home buyer, the mortgage company will be compensated. In most cases, the company is compensated through the closing costs of the loan. It could be a flat fee or a percentage of the loan amount.



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