Mortgage Lenders Pros Cons Direct Mortgage Lending Mortgage companies offer several home lending programs to different types of borrowers. Their credit requirements are usually more relaxed as they are focused on working with a wider range of borrowers. Brokers have access to a wide range of lenders' loan programs and rates.
Online loan sites also can help you figure out the range of loan options that are available to you, depending on your credit score, income, down payment, and home value. All lenders use a standard loan estimate form that details their offers, so it is easy to compare mortgage options side-by-side. If you want to compare loan programs and rates among straight-line lenders, you will need to apply to each separately and weigh the offers yourself. The mortgage rates that are offered will mostly depend on your credit score, how much debt you have already, where your home is located, how much down you are making, and how big a loan you are applying for. While an offer may change after you file an actual loan application, a pre-qualification gives you a good idea of what rates and terms you can expect. You fill out the loan application, meet with the loan officer, and go over the options you have. Whether you are buying or refinancing, you need to navigate the loan application, figure out what the offer is, navigate the escrow process, and ultimately, get the money. If you are having trouble with a mortgage application--such as low down payments or poor credit scores--a broker may be able to help.
Your realtor or real estate agent may be able to provide referrals for respected brokers in your area if you are looking to take that route. You are not required to use real estate agents, although they may be useful to move through the mortgage pre-approval process more quickly. In the highly competitive housing market, being able to close your loan on time is critical. Because lending is typically not the bank's main priority, processing a loan at a bank may also take longer than one at a mortgage company. If you do not have a stellar credit score (if you have had a bankruptcy or foreclosure, for instance), you may not qualify for a loan at the bank.
A general financial advisor may provide a broad financial overview and provide information on several financial products --but the bank's loan officer may not be particularly knowledgeable about mortgages. For standard mortgage loans, like 30-year fixed-rate or 15-year fixed-rate mortgages, a correspondent lender is often an optimal mix of rates, fees, and speed. Correspondent lenders generally offer better terms than brokers on standard mortgage types, such as 30-year fixed-rate mortgages and low-down-payment loans. Some direct lenders are private companies specializing in financing mortgage loans specifically for the general public - many operate online. A direct lender is a financial institution or private organization that provides a loan for the mortgage.