Can I Go Direct To a Lender, Instead of Through a Broker? What Are The Pro’s and Con’s of That?
Yes. The borrower has the freedom to choose either an independent mortgage broker or to go directly to the loan provider. Obviously, there are pros and cons to either decision, but there is indeed no “right or wrong” in this case. Ultimately, the decision should be made by the borrower using reliable information as well as evaluating the level of comfort in doing business with either party.
By going directly to a lender, the borrower is limited to only those loan programs accessible to and/or offered by that particular lender. This could potentially be harmful to the borrower if another lender has an identical loan program with better features or lower interest rates. Conversely, by using the services of an independent broker, the borrower is exposed to multiple lender programs and has the ability to compare them side-by-side.
However, when working with a broker there are several potential concerns that one must consider. The foremost concern borrowers have is about the legitimacy of the information they receive from the broker. How can a borrower really know what the interest rates are? How can the borrower evaluate the competency of the broker? Plus, there is the issue of the additional fees involved when working with a broker. Mortgages and settlement costs are high enough, but they’re often increased quite significantly due to the added fees from the broker and his agency. By going directly to a lender the borrower is able to avoid these fees.
