Who to go to for a home loan – broker vs direct lender?


Many people wonder who is better to approach when looking for a loan – a broker vs direct lender. A common misconception is that a direct lender will give you the better rate than a middleman would. However, that is not always so.

A direct lender usually works with mostly one main loan program and when you approach such a lender they will offer you a limited range of loan choices. Unlike direct lenders, mortgage brokers work with many lenders and have access to a greater variety of loan products and they more easily are able to find the most appropriate loan program for you.

Mortgage brokers or their loan officers often have a more flexible schedule – it will be easier to set an informal meeting with a broker to meet you out in the evening rather than have you come to the office in your working hours. So, in general a mortgage broker compared to direct lender can get you better flexibility and larger variety of options. Often, brokers can get you even better rates.

However, if you have bad credit and are shopping for a mortgage, you should know that it may be hard for you to get a broker for a subprime loan. Even some direct lenders have suffered badly due to the strain on the subprime market. So, if you have less than perfect credit, it may be better to go to a direct lender rather than a broker.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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