Deciding where to get your loan?

Unless you have a wealthy, generous Uncle you really only have two choices as to where to get your home loan. Either you go see a Direct Lender or bank, such as Bank of America or Ditech, or you seek out an Independent Mortgage Broker.

You may choose a Direct Lender because of an already established relationship, such as a checking or savings account, or their national advertising campaigns. But you may end up paying for that advertising in higher interest rates, and increased origination fees. Direct lenders also tend to offer a limited range of loan programs and may be inflexible when it comes to less then ideal borrower circumstances. They can only offer what they have on their menu (and they don’t allow substitutes).

Working with a Broker on the other hand, is like heading to the food court instead of a single restaurant. A Broker works with and has access to hundreds of lenders, which opens up to you almost limitless options in loan programs to better fit your needs. They also have a reputation for offering more responsive service, than Direct Lenders, often making themselves available to clients after normal business hours and on the weekends.
Brokers can offer lower rates and lower origination fees. And here is why, lenders offer Brokers the best rates because they bring lenders business in massive amounts, so lenders try harder to get the Brokers business.

Here’s my advice in choosing which is right for you: Shop around. Get the total cost, both the interest rate and the origination fee, and compare what each has to offer.
Choosing wisely though, you can have a painless, financially beneficial, perhaps even enjoyable loan process.