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The Benefits of Using a Direct Mortgage Lender vs. Banker

Updated: Jan 26, 2023

When it comes to securing financing for a home purchase, borrowers have a choice between working with a direct mortgage lender or a bank. Both types of institutions can provide home loans, but they differ in how they operate and the services they provide.

A direct mortgage lender (such as HomeTown Lenders NW) is a company that originates, funds, and services mortgages. They are often independent from banks and other financial institutions, and may specialize in certain types of loans, such as FHA or VA loans. Because they are focused solely on the mortgage industry, direct lenders may have more expertise and experience in this area.

One of the main benefits of working with a direct mortgage lender is that they can provide a more streamlined process. Since they originate, fund, and service the loans themselves, direct lenders can often underwrite and approve loans more quickly than banks. This can be particularly beneficial for borrowers who need to close on a home quickly, such as those facing a short sale or in a competitive housing market.

Another advantage of working with a direct lender is that they may be able to offer more flexible loan products and terms. They are not bound by the same regulations and rules as banks, and can be more creative in their approach to loan origination. This can be especially beneficial for borrowers who have unique needs, such as self-employed individuals or those with less-than-perfect credit.

Direct mortgage lenders also have the ability to service the loans they originate, which means they handle the payments and customer service aspect of the loan. This can be beneficial for the borrower because it allows for a more personalized and consistent experience, as well as a more efficient process for the loan servicer.

On the other hand, a bank is a financial institution that offers a wide range of services, including mortgages. Banks typically have more resources and a larger staff than direct lenders, but usually have more limited working hours.

It's worth noting that while direct lenders may have an edge in terms of speed and flexibility, banks may have an edge in terms of rates and terms. Banks have more resources and access to capital, which can allow them to offer lower rates and more favorable terms than some direct lenders, but can have less than favorable customer service since they are working with more customers at one time.

In conclusion, using a direct mortgage lender can be a good option for borrowers who need a faster and more flexible loan process with a personal guide through the whole loan process. The loan officers at HomeTown Lenders NW have decades of experience and can help you navigate through the complex home loan process. Fill out our contact form to get started!


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