What is the role of the lender in a mortgage transaction?

The role of the lender in a mortgage transaction is to provide the funds for the loan. This is a fundamental aspect of the mortgage process, as lenders supply the capital that allows borrowers to purchase a home or refinance an existing mortgage. The lender evaluates the borrower's creditworthiness, income, and the property’s value in order to determine if the loan can be approved.

This financial arrangement is crucial because without the lender's funds, the borrower would not have the necessary resources to complete the transaction. The lender expects to be repaid over time through monthly mortgage payments, which typically include principal and interest.

In contrast, the roles of issuing title insurance, conducting home inspections, and managing escrow accounts are performed by other entities involved in the transaction, such as title companies, home inspectors, and escrow agents. These roles, while important, do not fall under the responsibilities of the lender.