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Mortgage Brokers Versus Direct Lenders – Which is Best for You

Mortgage Brokers Versus Direct Lenders – Which is Best for You

Mortgage Brokers Versus Direct Lenders – Which is Best for You


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Home Page > Finance > Real Estate > Mortgage Brokers Versus Direct Lenders – Which is Best for You

Mortgage Brokers Versus Direct Lenders – Which is Best for You

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Posted: Jun 12, 2008 |Comments: 0

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Mortgage Brokers Versus Direct Lenders – Which is Best for You

By: iwantanoffer

About the Author

By: David Chodack. Established in 2006, iwantanoffer.com is an Online Real Estate Community(TM) providing a dynamic way to buy and sell real estate online. An inclusive platform allows buyers, sellers, real estate agents, investors, developers and services providers a place to connect online.

(ArticlesBase SC #447252)

Article Source: http://www.articlesbase.com/Mortgage Brokers Versus Direct Lenders – Which is Best for You





There is absolutely nothing wrong with going to a direct lender for a loan. The only problem is, that many people move the wrong reasons. Many people would be better off going to a mortgage broker, but they are under the mistaken impression that this will cost them money. The fact is, that unless the mortgage brokers is dishonest in some way, then going to a mortgage broker should not cost a borrower any more than it would cost to go to a direct lender and ideally, it can save them a lot of money.

Many people are confused about the way mortgage brokers get paid. This is why they think that a mortgage broker will charge them more money than a direct lender. They think they will have to pay a fee to the mortgage broker for his or her services, but they will not have to pay a fee to the direct lender.

This is an erroneous assumption. Many mortgage brokers do charge borrowers a fee, but guess what? So do direct lenders. Mortgage brokers generally charge the same fees, or even lower fees than the direct lenders in order to be competitive. They’re able to do this, because most direct lenders have two rate schedules, a retail rate sheet for borrowers and a wholesale rate sheet for mortgage brokers, offering the same loans at an average of 1 percent less than the price on the retail rate sheet. This way, mortgage brokers can add their fee to the wholesale rate and still be competitive with the retail rate that the direct lender offers to the public.

Why do direct lenders do this? Why do they offer lower rates to mortgage brokers, when those mortgage brokers are their competition? The answer is very simple. Mortgage brokers do a lot of paperwork and preliminary screening that the direct lenders would otherwise have to do themselves. If mortgage brokers did not exist, that direct lenders would have to hire many more in-house loan officers. These loan officers swing have to be paid, either on salary, or commission.

Without mortgage brokers, the in-house loan officers would have to sift through a lot of useless, unsuitable applications. The way the system works now, mortgage brokers do this for the direct lenders. Mortgage brokers deal with many different lenders and they only send applications to lenders they consider suitable. This save the lenders time and money. It cuts down on the number of in-house loan officers may need to hire.

The system works for borrowers because mortgage brokers can often help borrowers find the right lender with the right loan for their particular situation, the one with the best interest rate and terms for them.

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iwantanoffer -
About the Author:

By: David Chodack. Established in 2006, iwantanoffer.com is an Online Real Estate Community(TM) providing a dynamic way to buy and sell real estate online. An inclusive platform allows buyers, sellers, real estate agents, investors, developers and services providers a place to connect online.

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Source:  http://www.articlesbase.com/real-estate-articles/mortgage-brokers-versus-direct-lenders-which-is-best-for-you-447252.html

Article Tags:
mortgage, real estate, direct lenders, real estate information, real estate agents, mortgage lenders

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