When purchasing a new property you can either use a mortgage broker or direct lender. A broker works with multiple lenders and is able to compare rates, turn times, service, etc among lenders. A direct lender will work directly with you. Both utilize loan officers who could be your primary point of contact, answer your questions, help you through the application process, etc. A direct lender can also be a wholesale lender and thus work directly with borrowers, or work through independent brokers.

Any consumer can use a direct mortgage lender. Instead of using a mortgage broker, who in turn would go to several different lenders, you may approach a mortgage lender or bank directly. Many realtors have a professional relationship with a mortgage broker. They will often recommend a broker to their clients. This however, does not prevent you from going into a bank and making an application for your new mortgage directly to the institution.

A purchase mortgage for a property is not the only types of loan available from a direct mortgage institution. Direct lenders may also provide financial products for refinancing. Refinancing an original mortgage that has a high rate of interest can be very attractive when current interest rates are much lower. This refinancing option can sometimes lower mortgage payments and may be an option worth considering for homeowners, especially if they have an adjustable rate mortgage (also called an ARM). As with purchases, it is easier to refinance a home with good credit scores.

Perhaps you are seeking to pull out some of the equity of your home, without refinancing the original note. In this case a direct mortgage lender would be approached for a line of credit or second mortgage on the property. These are known as a HELOC (Home Equity Line of Credit) or Home Equity loan. These types of loans are in addition to the first mortgage currently in place. As with using direct lending for a first mortgage, your credit history could be important.

Whether you are seeking a first mortgage for a new home or just trying to fund some major renovations, you can work with either a broker or a direct mortgage lender. Both utilize a common application form known in the industry as a 1003. Remember – it’s your choice who you use for a home loan.