At first, it might seem tricky to differentiate a mortgage broker vs lender. After all, both provide mortgage loans. While both brokers and individual lenders can help you with the same service, there are some important differences homeowners should be aware of.
Here is a basic guide to the difference between direct lenders and mortgage brokers:
A mortgage broker connects borrowers and lenders, while the mortgage lender - a bank or financial institution - deals directly with the borrower. Brokers can help you with comparison shopping for different rates and facilitate the application process.
Working with mortgage lenders directly means you are in full control of every step of the journey - and any associated hassle.
Brokers are usually paid on a fee-based schedule, while lenders make their money through a variety of different fees and charges. Origination fees and interest are major examples of how lenders are compensated.
Choosing between a mortgage broker or a direct lender depends on a number of factors and personal preferences. A broker can be the more convenient choice for many borrowers, as they handle the process of contacting different lenders to find a good fit. However, for those who want full control of the homebuying process, going straight to the bank might be a better choice.
One thing to keep in mind is some lenders work exclusively with mortgage brokers, and some brokers are exclusive with certain lenders. This could mean working with a broker may limit your choices of lender and vice versa.
However, if you place a high value on convenience, a mortgage broker can save you significant time and effort in the mortgage process. If you prefer contacting each direct lender to crunch the numbers yourself, skip the broker and work directly with a bank or institution of choice.
Barbara started in Real Estate in 2006 after another Realtor told her that her personality made her a perfect fit for the industry. There is no doubt that Barbara’s lively personality and warm heart make her an awesome Realtor. Barbara was born in Italy and speaks fluent Italian. She grew up in Medford and eventually moved to Everett where she resides today. Her personality combined with her background in home insurance and customer service make her experienced in multiple facets of Real Estate and willing to work hard to help her clients achieve their goals. In my spare time I volunteer at animal shelters and foster dogs until we find their forever home. I am also proud to say that with every transaction I complete, a portion of my commission is donated to a local animal shelter.
