Which entity typically provides a mortgage loan?

A mortgage loan is typically provided by a bank or a financial institution because these entities are specifically structured to offer various types of loans, including mortgages. They have the requisite resources and financial expertise to assess a borrower’s creditworthiness, establish terms and conditions for the loan, and manage the loan servicing process.

Banks and financial institutions have the capacity to fund large sums of money, which is essential for a mortgage since it generally involves a significant amount that allows buyers to purchase property. They also provide different mortgage products, such as fixed-rate, adjustable-rate, and government-insured loans, catering to diverse borrower needs.

In contrast, while a title company plays a crucial role in the property transaction process, ensuring that the title is valid and can be transferred, it does not provide loans. Real estate agents are primarily responsible for facilitating property buying and selling and do not typically involve themselves in lending. Homeowners associations (HOAs) manage communal aspects of residential communities but have no function in the mortgage lending process either.