This article was brought to you by Jenny Jordan http://www.mortgagebrokersmelbourne.net

Mortgage Brokers Melbourne

Direct Lender Mortgage

Click the link below to visit our website:

http://www.mortgagebrokersmelbourne.net

This article was brought to you by Jenny Jordan http://www.mortgagebrokersmelbourne.net

Choosing between mortgage broker and direct lender mortgage can be pretty confusing for the

borrower. Going to a direct lender can save broker’s fees on one hand, but the best loan terms

and mortgage may only be available if you hire a mortgage broker. Here are a few facts below

that can clarify the picture.

Statistically differentiating brokers and direct lenders

• In 2004, 68% of consumers preferred mortgage brokers over direct lenders. This shows that the

majority is opting for brokers.

• In seeking the answer to whether mortgage brokers really cost less to consumers a study

published in Mortgage Brokers and Sub Prime Market (2004) can be of great help. This was a

study of data obtained during 1995 to 2001. The study made it evident that people opting for

mortgage brokers’ end up saving as much as 1.132% and 1.973% on the first and second

mortgage respectively. The reliability and strength of the study can be estimated from the fact

that this data was obtained from American Financial services association.

The reason behind the high cost of direct lender mortgage:

A broker can purchase the services from a variety of lenders at wholesale rate and offer it to

consumers. But direct lenders will charge you for all the overheads incurred. This is why their

cost is recognized as retail cost. Hence the difference between the two is the same as the

difference between wholesale and retail. This is why even after the addition of broker’s fees the

total cost bared by the borrowers is still lesser than direct lenders cost. Furthermore the

competition among lenders also plays its part in bringing much lower prices to brokers. These

savings also end up passing to borrowers.

To conclude, the thing that matters the most is the borrower’s money and it should not be

wasted, at least not for the compensation of direct lenders overheads and expenses

(advertisement, hiring staff, and equipments). While different people might have different

opinions and might advice differently, the consumer should not be distracted by irrelevant

factors and go for the benefit of keeping the cost low and brokers can be extremely helpful in

keeping your cost low. The end decision is to be made by the people who are going to obtain

loans for their homes. Now it depends on the choice of the consumer, whether he goes for

mortgage broker’s wholesale price or the retail price obtained from direct lender mortgage.

This article was brought to you by Jenny Jordan http://www.mortgagebrokersmelbourne.net

Mortgage Brokers Melbourne

Direct Lender Mortgage

Click the link below to visit our website:

http://www.mortgagebrokersmelbourne.net