So you are looking for a home loan. Should you use a broker, or a direct lender? I my opinion a direst lender is the way to go. I was a broker for many years and finally made the change. So what does a direct lender offer that a broker does not?
1. Underwriting questions.
A direct lender does all the processing, underwriting , funding all in one place. So, if a underwriter has a question about a file he/she just contacts the processor that is in the same building or at the next desk. It makes for a much easier clarification of the file and underwriting time.
At a broker the loan is processed then sent over to the lender of choice for underwriting. It is then put in line with the other loans that need to be underwriten. If the underwriter has questions. The loan is haulted. The processor is then contact by someone at the lender, not the underwriter for clarification. After she has gone through the others before yours. Or the loan is sent back for clarification, then sent back to the lender.
2. Underwriting times.
A direct lender usually has underwriting times of 24-48 hours
A broker is usually 2 to 6 days.
Why? A broker has to get in line with all the other brokers and wait there turn. If you have 20 brokers sending 10 loans over, that is 200 loans that must be underwriten. With a direct lender, they only underwrite there loans. So if you have 10 loans, you have 10 loans.
3. FEES
A direct lender has less fees. A direct lender has the fee that any bank would charge. Processing, underwriting, doc prep, flood cert, etc..usually totaling about $1800 to $2000.
A broker has all these fees plus there own processing, admin fee, etc... usually $1200-$1500
So you can see a broker will cost you more.
4. Interest rates
A direct lender will many time have better rates because they have the volume and not all the over head. They make better quality loans for their investors. Thus, getting better interest rates for their customers. Direct lenders have just as many lender choices as a broker without the extended underwriting times and with better interest rates.
A broker has many choices for lenders. But many times rates are marked up by the banks, depending on the brokers volume and quality of there loans. The rates are then marked up buy the brokers for better profit.
In my opinion it has served my clients a great service by me moving to a direct lender. With 91% of my business being introduced to me by past and current clients, business associates, family and friends. I do my best to strive for the best possible service for my past, present and future clients.
For more info contact me at http://www.mortgages4california.com/. For down payment assiatance http://www.downpayment-assist.com/
Keith Woeste
Sierra Pacific Home Loans "A Direct Lender"
PH.831-801-8667
FX. 831-665-5260
NMLS#292588
Sierra Pacific Home Loans, Inc.
NMLS CA-DOC 222100 - Since 1979
California Finance Lender, CA Dept of Corporation Lic 607373
3478 Buskirk #260, Pleasant Hill, CA 94523
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