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Why You Should Choose A Direct Lender

July 6, 2020

Why You Should Choose A Direct Lender

You’re in the market to buy a new home and you’ve found the perfect place – your dream home – now all you need to do is review your financing options and get pre-approved for a mortgage. 

For many people, this is the stage that poses the most uncertainty. No longer are things as easy as putting on your best suit and heading down to the local bank. Nowadays, there are a host of options to choose from, each offering a variety of advantages and disadvantages. 

Of those home financing options, the most common among are: 

  • Direct Lenders
  • Mortgage Brokers
  • Banks
  • Credit Unions

So, which should you choose and why?

Why Choose A Direct Lender

When you look to secure a loan, there is one thing all mortgage providers have in common. They provide you access to the financing you need to buy your home, with the expectation that you repay them the full amount you borrowed, plus interest.

Where they differ is in the method.

Who they work with Availability Mortgage options Accessibility
Direct Lender Directly with you – the borrower 24/7 Loan programs that they fund. Low
Brokers The borrower and multiple lenders 24/7 Options from multiple lenders Low
Banks The borrower Bankers hours Their own loans programs Medium
Credit Union The borrower Bankers hours Their own loan programs High

 

While there are several differences in the mortgage provider you choose, a direct lender offers the best mix of availability, accessibility, and loan options. 

There are a number of benefits to using a direct lender for the purchase of your home. Let’s take a look at them, in comparison to your other financing options.

Direct Lenders vs Mortgage Brokers

A mortgage broker essentially serves as a middleman for several different lenders. You deal with a single mortgage loan originator who works to match you with the lender that they believe best will best fit your needs. This is a great option, if you have extra time, sufficient knowledge of the mortgage industry, and aren’t concerned about developing a relationship with your loan officer.

If any of those things matter to you, a direct lender may be your best option. With a direct lender, you go directly to the source as a direct lender actually makes and funds your loan in-house. The person you work with actually has a role in making the final decision and will serve as an ongoing consultant through the closing of your loan, and beyond. This means your questions will be answered faster, and your loan can be approved quicker due to the fact that you are working hand-in-hand with the lender and not through an intermediary.

Direct Lenders vs Banks

Most large banks offer mortgage lending options as part of their portfolio of financial services. Like with direct lenders and credit unions, banks process their mortgages in-house and offer the benefits that come with working directly with your mortgage provider.  If you have a long-standing relationship with your bank, they may offer certain incentives in the purchase of your home – in terms of closing costs and fees. 

The challenge with big banks comes in their availability. Bank loan officers are often spread thin, and required to work with other financial services – outside of mortgage loans. This paired with the fact that they are only available during “bankers hours” can lead to poor customer service. 

With a direct lender, this is not the case. Direct lenders offer the accessibility and relationship-driven experience you’ll find at a big bank but, aren’t limited in their availability. So, have a question after hours? Or need a document re-sent immediately? A direct lender will be there for you. 

Direct Lenders vs Credit Unions

Credit unions are member-owned, not-for-profit organizations. While they do provide loan programs to their members, often at discounted rates, the challenge is in their membership requirements. 

In order to become a member of a credit union, you typically need to be invited via the organization you work for or past affiliations (such as the military). While credit unions are the closest thing we have to the “small-town bank” and are built upon the relationships they foster, they tend to have limited financing options and availability. 

A direct lender offers all of the benefits of a credit union, in terms of personalized, local service without the lack of accessibility or availability.   

Trust The Mortgage Firm Gainesville With Your Home Loan

You don’t want to trust just anyone when it comes to what may be the biggest financial decision of your life. You want someone who cares about you, your family, your pets, and your path to building an asset that will serve you for generations. 

If you’re looking for someone that is local, cares about our community, and will help educate and empower you every step of the way, check out The Mortgage Firm Gainesville and talk to one of our experienced home loan specialists.