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Home Loan Advisors: Loan Broker & Mortgage Lender Differences

There are two types of home loan advisors capable of facilitating your home loan, direct mortgage lenders and home loan brokers.  A home loan broker is an advisor or consultant who shops multiple lenders to find you the right home loan, fees and interest rate.  A direct mortgage lender representative works for a bank, credit union, or other lending company which actually lends directly to you from their own portfolio of home loan programs.

 
Home Loan Brokers
Direct Mortgage Lenders
Benefits
  • Personal assistance and guidance on the most appropriate home loan for your situation
  • May shop your loan to several mortgage lenders to find the best home loan interest rate and fees for you (multiple lending sources)
  • Assists with home loan document preparation
  • Acts as an intermediary between you and the actual mortgage lender
  • The actual mortgage lender may offer a lower home loan interest rate as the loan broker handles much of the preparation and documentation
  • May find you a mortgage lender, bank, or credit union in another part of the country that best fits your needs
  • Direct communication with the mortgage lending company or agency funding your home loan, no “middle man”
  • Expedient home loan processing
  • Typically licensed in all 50 states
  • Flexibility in underwriting your home loan
  • May have special home loan programs or interest rates for your specific situation
  • Actually able to approve or disapprove your home loan as they’re the final decision makers
  • Direct mortgage lender representatives may provide a higher level of customer service
Disadvantages
  • Origination fees may be higher
  • Subject to the underwriting guidelines of the mortgage lenders they work with
  • Can only work through mortgage lenders they have been approved with
  • May be biased towards certain mortgage  lenders regardless of whether they have the lowest home loan rate or not
  • May have more incentive to place you into a different home loan product than what is appropriate because of extra commissions or fees
  • Typically licensed in only a few states
  • Typically limited types of home loan programs (single mortgage lending source)
  • Generally lower experience levels in home loan consulting
  • Less likely to get the lowest home loan interest rate quote as direct mortgage lenders aren’t competitive in every type of home loan
  • Branch representatives are typically salaried and may not offer the service level a home loan broker would
  • May not have a local branch to serve your needs.

There are quite a few differences between the types of home loan advisors who can facilitate your home loan request.  Both have several advantages and disadvantages, which is why LoanEXA home loan advisors include BOTH home loan brokers and direct mortgage lender loan or branch representatives.

Quite frankly, you’ll get the best online home loan rate quote through LoanEXA because we work with both home loan brokers and direct mortgage lenders! 

LoanEXA promotes competition between all loan advisors - the best of all worlds!