What is the difference between a Mortgage Broker and a direct lender?
A direct lender is a financial institution that uses its own funds to close the loan. They have to select a loan program that is within their own product line, and do not have access to any other programs. An example of one of the most common direct lenders is a bank. A Mortgage Broker is someone who has direct relationships with many different lending institutions. They have access to multiple programs from multiple sources. This gives the borrower more choices and the advantage of getting multiple quotes without having to run their credit multiple times! A Mortgage Broker is also considered a wholesaler and can usually offer lower rates than a direct lender.
A Mortgage Broker is a “middleman” who tries to find a lender who will pay them commissions on your loan. That cost is often passed on to you in the form of higher rates and/or fees. With a direct lender like TownCenter Mortgage, you talk directly to the lender and not a “middleman”. That means we can pass on the savings to you. We are the company that is funding your home loan. Since we are the experts, we will walk you through the loan process every step of the way.
Related Questions
- How does a mortgage loan originator working for a licensed mortgage lender or mortgage broker meet the requirement to be covered by a surety bond?
- Does a mortgage broker or lender need to be a FHA approved lender to originate a single family loan that is subsequently insured by FHA?
- What is the job of the mortgage broker?
