Direct lenders are small scale lenders that is a fraction of the size of regular banks.
This is opposed to correspondent lenders like established mortgage brokers who are making loans in a larger lender’s name.
These lenders label themselves as direct lenders to market themselves as not being brokers. And also to market other products to consumers.
Some products might include:
- Payday loans
- Personal loans
- Auto loans
From a borrower’s perspective, the main difference with going to a direct lender versus a mortgage broker is that a direct lender will probably only be able to show what are best home loans they are offering. While a broker would be able to show what are the best loans in the market from different lenders.
However, when dealing directly with a lender, they would be able to be more clear and concise with terms and conditions.
They might also be able to deviate from standard interest rates when a borrower negotiates hard enough.
Brokers however, even though they yield enormous influence over bankers, might only be willing to provide the borrower with standard rates.