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.
When you are going to apply for a direct mortgage, you can utilize either a mortgage broker or a direct lender. Mortgage banks do allow borrowers to contact them directly. Direct lenders may also have an online application process. If not, you may be able to obtain an application at their offices or branches. Even if your realtor has recommended a specific mortgage broker, you still have the ability to attempt to obtain commitment from a direct lender on your own. For your first mortgage, there is no requirement that you must use a broker. You are able to apply with a lender directly.
Direct mortgages are available not only for buy loans, but also for home refinancing. Many people who bought property during a period when interest rates were much higher will look to refinance their note. With interest rates as low as they are now, this provides an opportunity to decrease the monthly note payments. Refinancing could be an especially attractive option for people with an ARM (small for adjustable rate mortgage) because they can lock in a fantastic rate for the life of a loan and avoid the risk of rates going up again. Just as with a new mortgage application, going to a direct lending is a viable alternative for refinancing.
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 vital.
Both brokers and direct lenders utilize a loan application form known as a 1003. Regardless of the type of loan-whether you want to buy a home, refinance it for a better rate, or take out some spendable cash-going to a direct mortgage lender is an option that can help you find the money you need.