Mortgage broker vs. a Direct Lender

                If you are in the market for getting new financing for either a purchase of a home, or refinancing your home, you may or may not be aware of a couple of options you have.  These options, depending upon your situation, may help you with the process.

                Option 1 is a direct lender.  Option 2 is a mortgage broker.  What’s the difference? Which one is better?  What are the advantages and disadvantages to each?  We hope to answer these questions as we move through this article

           A mortgage broker is a professional that brings together borrowers and lenders.  They do not loan you the money, they literally shop for someone to loan you the money.  They can do comparison shopping of several lenders to find the best fit situation for the borrower.

                They gather all the borrowers information that the lenders will need, and evaluates both how much borrowers can borrow and can afford. Mortgage brokers are responsible for the entire communication process between borrowers and lenders during the approval process.

They can also identify the best lenders for the situation, the best type of loan, and such, based upon geographical location, and type of property being purchased or refinanced.

Mortgage brokers can also help potential borrowers who have had credit issues, employment changes, and/or bankruptcy.

One of the main advantages of mortgage brokers is that they are a single point of contact that eliminates the need to apply to several direct lenders.

A direct lender is a financial institution that actually puts up the money for the loan.  These could include banks, some credit unions, or other mortgage companies.

Some people may choose to use a lender whom they already have a relationship with, for example if you have bank accounts at a certain bank, you could pursue a loan via that bank as an established customer.

The process would be filling out an application for the loan, and submitting it to the direct lender, with no middle man involved.  Without a middle man the process may be faster, and may be less expensive.

But if you don’t get approval, you may have to start over again with another lender.

The main difference is how they are paid.  Mortgage brokers and direct lenders can both charge fees for their services.  Make sure you do a little background check and ask what fees are involved.

Whatever your choice, we offer mortgage calculators on this web site to help you get an idea of what your monthly payment will be.

Check out our page  here  and plug in your numbers to start your process.

Use of the calculator is free.