Getting a mortgage isn't always a case of simply heading down to your bank and applying. There are several different types of institutions that arrange mortgages, and you may want to consider your options carefully before choosing which type to go for.

Banks and Credit Unions
Banks and credit unions use money deposited with them to make loans and mortgages. If dealing with a local institution is important to you, a mortgage banker may be a good option. Additionally, if you consolidate all your financial affairs with a single bank, it may make it slightly easier to get favorable interest rates or other mortgage terms. These lenders tend to be more choosey, and many banks and credit unions do not approve applicants with bad credit ratings.

Mortgage Bankers
Mortgage bankers are companies that are large enough to create loans and loan pools. They then sell these to other lending institutions (such as Fannie Mae and Freddie Mac). These companies raise money through a line of credit with a large financial institution. Because mortgage lending is their only business focus, mortgage bankers are often able to offer competitive terms and can offer mortgages to most types of borrowers.

Portfolio Lenders
Banks and some other large institutions have their own portfolios of loans that they do not sell on the secondary market. The terms of portfolio loans are sometimes not as competitive as loans from other types of institutions (and they are usually adjustable-rate mortgages); however they are often easier to get for people with bad credit or other financial problems.

Mortgage Brokers and Wholesale Lenders
Mortgage brokers do not actually give you a mortgage. Instead, they will do the legwork for you and find you a mortgage lender. Brokers can be helpful if you're in a unique set of circumstances - if you have bad credit, or are self-employed, for example - because they are in contact with many different mortgage lenders, and have the ability to find one which meets your needs more quickly than you might be able to yourself.

Wholesale mortgage lenders act as intermediaries between mortgage bankers and portfolio lenders, and mortgage brokers. The wholesale lender offers mortgage packages to mortgage brokers at a reduced cost compared to the retail rate. The mortgage broker adds their fee to the loan amount before passing it on to their client. This means there is little difference in cost between a mortgage from a broker and one from a lending institution; however, dealing with a broker can be helpful particularly for first-timers.

What Happens if Your Mortgage Is Resold?
The secondary mortgage market is a national market where mortgage originators (the institutions who interact with borrowers) sell mortgages to other investors. Selling mortgages on the secondary market is how many lending institutions create the funds needed to originate more loans. While portfolio lenders don't sell their mortgages on the secondary market, many other types of lending institutions do.

The existence of the secondary mortgage market adds a further element of competition to the mortgage business, which helps reduce interest rates and provide more favorable mortgage options to borrowers.

If your mortgage is resold, the terms and conditions of your loan will not change. The only thing that changes is that you will mail your payment to a new lender. If your loan is sold, your original lender will notify you of the fact, and will tell you who your new lender is and where to send subsequent payments.