Reasons to Work with a Direct Mortgage Lender Versus a Broker

Posted: 3/7/2017 | Read Time: 5min
Last Updated: 9/11/2021

Sixty-one percent of Americans spend up to two hours a week on the internet searching for their dream home*, but how many of them are searching for their dream financing team as well?

If you’re one of the 38 percent of people in the United States on the hunt for a new home in 2021*, one of your first steps is to review your financing options and get pre-approved for a loan. This used to be a matter of walking into your local bank or credit union and applying for a mortgage, but with today’s demanding housing market, potential homeowners need efficient home lending options to keep up with the market.

Today, there is a wider range of home financing options, including working with a mortgage broker versus a lender (also known as a direct lender), but how do you know which is right for you?

Let’s discuss the differences between a mortgage broker versus a lender to help you determine which of the two is the better fit for your needs.

What is a Direct Mortgage Lender?

A direct mortgage lender is exactly what it sounds like – direct. Instead of going through a middleman to find the right lender and service your loan, a direct lender does everything in-house. From examining your credit to handing over the final check, a direct lender is your one-stop shop for everything involving home loans.

Mortgage Broker vs. Direct Lender

The biggest differences between a mortgage broker versus a lender are who is doing the work, who you are in direct contact with and how long it takes to process the loan.

With a direct lender, you go right to the source. The person taking your application actually has a role in making the final decision and in many cases, serves as your ongoing point of contact.

With a mortgage broker, communication is less streamlined and you don’t always get to communicate with the people making decisions regarding your home buying process.

Additionally, digital direct lenders may save you even more time, money and effort with robotics taking care of some work you would otherwise need to do yourself. The use of digital technology could lead to shorter loan processing times or the chance of finding that perfect home, faster.

Here are six more advantages to working with a direct mortgage lender versus a broker.

Six Advantages to Working with a Direct Mortgage Lender

  1. Licensing
    In most cases, a direct lender is licensed to provide mortgages in most, if not all, 50 states. Many mortgage brokerages are only licensed in a few states, which can create issues if you are purchasing a property where the broker is not licensed.Direct lenders often times have a wider variety of loans you could qualify for, giving you more options when it comes to buying a home with a loan that fits your needs.
  2. Flexibility
    A mortgage broker is bound by the guidelines set by the individual lender. The broker does not have the discretion to waive certain requirements to gain your business. While both must follow government program requirements, direct lenders have the flexibility to waive some qualifications and fees under certain circumstances.
  3. Fees
    Every lender charges certain fees for processing a mortgage loan; however, the fees charged by mortgage brokers are often higher than those charged by direct lenders.When deciding whether to work with a mortgage broker or a lender, it is important to ask about all fees associated with loan generation before you begin working with one company over another.
  4. Speed
    With a direct lender, everything is typically processed in-house. Robotics and digital processes are positioned to find mistakes and make calculations, often resulting in more efficient turnaround times.In fact, direct lenders like WCM are capable of beating the industry average closing time by 15 percent** with the help of digital advantages. Compare this to a broker who has little control over the processing of your loan and the disbursement of your funds!
  5. Rates
    There is a common misconception that mortgage brokers are able to offer better rates than direct lenders. In reality, all mortgage rates are driven by what occurs in the secondary market, which means that every lender bases interest rates on similar information. Economic indicators like 10-year Treasury and mortgage rates, for example, will have more implications for those looking to buy or refinance a home than a mortgage broker versus a lender will.As you decide whether to work with a mortgage broker versus a lender, be sure to compare closing costs. This move alone could save you big.You can see for yourself with a mortgage rate quote from WCM!
  6. Personalized Solutions
    While a mortgage broker may offer products from a wide array of different lenders, they may highlight the products that will garner them commission.Direct lenders often have a more personalized approach. They focus on securing great loan options and rates for you, providing excellent service above self-interest.At Wyndham Capital, we offer a wide array of loan programs. Our loan officers go the extra mile, taking the time to understand your financial needs and goals to create a personalized loan solution that fits your life.
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What You Get When You Work with Wyndham Capital, a Direct Mortgage Lender

With the power of digital advantages on our side, Wyndham Capital Mortgage is able to offer the top-notch customer service, loan products, competitive mortgage rates and low closing costs traditional lenders and mortgage brokers can’t. Our digital advantages are here to serve you, making the entire process from application to eClose, one you never imagined could be so efficient.

Connect with one of our mortgage loan officers today to find out more about how a digital direct lender like Wyndham Capital can better serve you.

 

*Wyndham Capital Mortgage commissioned Atomik Research to run an online survey of 2,342 adults in the United States for their Mortgage 101 survey. The margin of error fell within +/- 2 percentage points with a confidence interval of 95 percent. The fieldwork took place between March 23rd and March 29th, 2021. Atomik Research is an independent creative market research agency.

** 15 percent faster close time based on Wyndham Capital Mortgage closing data from 2019 to 2020 versus industry numbers courtesy of Ellie May Organization Insight Report data from 2019-2020.


Maggie joined the Wyndham Capital Mortgage team in November 2020 as a Content Strategist. She has more than six years of content creation experience, which includes launching WBTV’s digital brand Queen City Weekend (now QC Life) and garnering more than 1.1 million page views across her articles. With a love of storytelling, she hopes to bring that passion to WCM and the many families it serves. She resides in Charlotte, North Carolina, and can often be found at a coffee shop, latte in hand.

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