A first lien loan is the mortgage placed on the home before any other loans are taken out. It is usually the loan you use to buy the home and may be the largest loan on the home. The lender of a first lien loan has first claim on the home in the case of default.

There are several types of lenders who specialize in making loans on homes.

S&Ls and MSBs. These are savings and loan associations and mutual savings banks—depository institutions that offer checking and savings accounts and use the money to make loans. Most of these institutions also operate mortgage banking operations, which makes available to them a wider variety of loans they can keep or sell. Because of certain regulations, most of the loans they make are home mortgages. The institution you deal with will probably be a local association or branch, but in some cases out-of-town lenders will be actively making loans in your area.

Mortgage Bankers. These companies make loans and sell them to investors. Incidentally, it makes little difference who owns your loan. It does make a difference who services your loan, that is, who collects the payments and handles the escrow account. In many cases, the lender who originated the loan will service it. However, it is becoming more common for the servicing to be transferred, even for loans made by local institutions. Servicing entails collecting your payments and making sure that sufficient insurance is maintained and property taxes paid.

Mortgage Brokers. These firms operate much like mortgage bankers. However, they do not use their own money to originate loans. Instead, they find the type of loan you want and originate the loan for the lender chosen. A broker may represent a number of lenders. They can help you choose from among an array of loan types. Often, they can find loans that cater to special problems, such as a borrower without an established credit record. Brokers operate on fees that lenders pay for submitted loan applications.

Within limits, real estate brokers can act as mortgage brokers. Some are hooked up to special networks of mortgage lenders. Through the use of specialized computer software, the broker can access information on loans currently offered by lenders in the network arid help the homebuyers select a loan and prepare a loan application, all within the real estate broker’s office. If you like the convenience of such one-stop shopping, ask about the availability of “Computerized Loan Origination” when meeting with your real estate sales agent.

Other types of lenders may make home mortgage loans as well:

Commercial Banks. Although banks specialize in short-term and business loans, they are becoming more active in home mortgages, particularly adjustable-rate loans. Physically, banks and savings and loans are similar. Banks generally have the word “bank” in their title, while S&Ls often use the word “savings?’ If either uses the word national or federal in its title, it is chartered by the Federal Reserve System (for banks) or the Federal Home Loan Bank Board (for savings and loans or mutual banks). Others are chartered by a state authority. The difference may affect the types of loans they are allowed to offer.

Credit Unions. If you are a member of a credit union, you may be able to get a mortgage loan from this source. Credit unions specialize in smaller, shortterm loans but may offer some types of home loans.

Stockbrokers. If you have an account with a stock brokerage firm, you may be able to secure a mortgage there. Most stockbrokers, even discount brokers, offer mortgage loans. If your portfolio is substantial, you may receive favorable terms on the loan. Many brokerage houses offer a “pledged asset” mortgage that obviates the need for a big cash down payment. If you pledge the portfolio as collateral on the loan, you may borrow up to 100 percent of the value of the home. Of course, you cannot liquidate the portfolio while it is pledged and you may have to add securities or money if the stocks fall in value.

Sellers. When buying a home, it is also possible to obtain financing from the seller, especially one who is anxious to move. The mortgage rate buyer and seller agree upon may represent a happy compromise between what the seller could earn on money in the bank and what the buyer would have to pay for borrowed funds.

Refinancing Options. If you are refinancing a first mortgage, you may want to check with the original lender first. It may be possible to avoid some of the closing costs, especially if the loan was made within the past few years. You have established a payment record with the lender, so a new credit report shouldn’t be needed. Also, it may be possible to use the original survey. If your lender refuses to waive these costs, you may want to consider other lenders.