I am a broker as well as a direct lender/bank so I will give you the skinny. Most of the Real Estate Pros below have done a good job of explaining the difference so I will try not to repeat what has already been said. Brokers have the availability of picking from many banks in order to find a place for your loan but this is not so much about the lowest rate as it is about guidelines. Each bank has its own guidelines so if your scenario is outside of a plain vanilla deal then a broker will have to figure out which bank's guidelines will approve your loan. Bad Brokers will draw you in with a low rate and pretend everything is fine and not have any idea of the guidelines of the bank they are using for your loan. Brokers also have no control over the process. The processors and Underwriters work for the bank not the broker, this is very important if you have a time line to adhere to and if you need a little help on guidelines. Loan officer's that work for Wells Fargo, Chase, Citi, etcâ€¦ can only get their rates and guidelines only. There are Loan officers that work for non-depository banks that can take loans to several banks such as Wells, Chase, Citi, etc.. They are not acting as a broker rather they lend their own money and then sell the loan to Wells, Chase, etc... This is where you will most likely get the best deal and have the most amount of control over the loan process. Some direct lenders can even sell direct to Fannie and Freddie giving those lenders the most flexible guidelines outside of a portfolio loan. Like I said I am a Direct Lender/Bank and a broker and my company does have the availability to sell directly to Fannie and Freddie so I am the complete package and can actually give you the real pros and cons for your scenario. My Realtor partners love me because I can tailor our client's mortgage to exactly what they need whether it be a less than 30 day close, a buyer with less than 600 Fico scores, lowest rate or a Self-employed borrower that can't show income but wants to buy a 2 Mil house. My comments and those of my fellow real estate pros should shed some light on the difference for you. Please feel free to reach out to me if you have any questions, I am here to help.
All the best,
VP of Retail Sales
Toll free: 800-359-1996 x551
Alt emai: fritz@post.Harvard.edu
NMLS ID: 387922
Visit my webpage: http://www.totalmortgage.com/bankers/fritz-walter/
Company Website: http://www.totalmortgage.com
Total Mortgage Services, LLC - NMLS #2764
Licensed in: CT, FL, MD, NJ, NC, SC, TX, VA
Total Mortgage Licensed in: AR, CA, CO, CT, DE, DC, FL, GA, IL, KS, ME, MD, MA, MI, MS, NE, NH, NJ, NY, NC, OH, PA, RI, SC, TN, TX, VT, VA, WV, WA
Total Mortgage offers a complete selection of mortgage programs including:
Conventional, FHA, FHA 580-639 FICO, FHA 203 Renovation (Streamline & Consultant), HomePath, VA, VA IRRL, USDA, Jumbo financing , and No Income or reduced income. Portfolio, jumbo, and conventional programs offered for self-employed borrowers as well.