When you are in the process of finally securing your new home, there is one step left to do: securing your mortgage. Then here comes another dilemma for someone like you, a new house owner, that is to either work with a mortgage broker or find a direct lender.
In reality, there are many stated advantages and disadvantages in choosing either from the two options, but how can you identify which works for you best? You cannot go around wasting your time in testing both waters, that is why, in this article, we will help you balance out your options, and in the end, you’ll get to choose which is best for you.
Mortgage Broker VS Direct Lender
First things first, identifying their differences and services offered, this way, you’ll have an overview of what makes them different from each other.
Mortgage Broker. They are commonly called as “middlemen”. Basically, they handle all the paperwork and do the legwork for you. They act on your stead rather than you doing all the work. They are like your personal shopper of a right lender, instead of you going around, your mortgage broker looks for the best deal and matches it with your current credit status.
Like in Mortgage Simple, they are experienced mortgage brokers that can help you find the best product. They go through different financial institutions and lenders to find the most competitive mortgage providers just for you.
Direct Lender. These are organizations like banks and other financial institutions that offer mortgages. A direct lender is actually the source and the ones that a mortgage broker are looking for.
Working with a mortgage broker best offers
As mentioned, choosing either of the two options has actually various advantages and disadvantages. For now, let us focus on the benefits if you decide to work with a mortgage broker.
A mortgage broker best offers include:
Detailed comparison. This means that you’ll get an accurate rate, fees, and features of each prospect lender in your area. To stress out, your mortgage broker is responsible for going around and looking for the best deals that work for you.
Wide mortgage options. A mortgage broker has an extensive list of lenders under their wings. That basically means, they can go around matching your credit report status to a wide array of lenders under the list.
It is also essential to take note that there are three different kinds of brokers.
- Tied brokers. These types of brokers are tied up to a single lender, which means they only offer what mortgage services are available in the company.
- Multi-tied brokers. Unlike to tied brokers, multi-tied brokers have a limited range of mortgages but comes from a wide panel of mortgage lenders.
- Independent brokers. These types of brokers are the most common and best to work with. They have access and contacts to different mortgage lenders and have a great advantage to find the best deal for you.
Expert assistance. Going through different mortgage applications can confuse people, especially the ones that are new in the industry. Getting a mortgage broker can offer you expert help and get you through the paperwork with minimal confusion.
Great advocate. An excellent mortgage broker with good standing can advocate on your behalf, this means, you’ll get a high chance of getting approved and success with the process.
The best thing in going to a direct lender;
On the other hand, while there are many benefits in working with a mortgage broker, going to a direct lender can be a good option too. Here are some points that might help you in your decision:
In-house processing. Going to a direct lender gives you an edge to have all your paperwork done in an in-house processing. Since a bank loan officer receives your application, you’ll get a direct line in getting the best deals at the bank. Also, the processing speed is faster.
Up-close inquiries. The best thing in going direct is you can raise all your questions and confusions direct to the loan officer. Any questions you had in mind can be addressed and clarified by the bank loan officer—no need to have a middleman to bridge your questions.
Freebies. Going directly to a lender, your bank loan officer can offer you financial products deals like credit cards or savings accounts that a mortgage broker is not provided with. These kinds of offers are exclusive to direct customers only.
Whether you choose to work with a mortgage broker or going directly to a lender, your decision must best benefit you. If you don’t like the hassle of going around looking for the best lender that you can work with, working with a mortgage broker is best for you. But if you are the type of customer who likes to do everything personally, going direct can work for you. Either of the two has significant advantages, it’s all up to you, which you think works and offers the best for you.