Mortgage broker vs lender: Understanding the difference

by Barbara Rybicki 02/20/2023

Two businesspeople shaking hands in suits

At first, it might seem tricky to differentiate a mortgage broker vs lender. After all, both provide mortgage loans. While both brokers and individual lenders can help you with the same service, there are some important differences homeowners should be aware of.

Here is a basic guide to the difference between direct lenders and mortgage brokers:

Key differences between mortgage brokers & lenders

A mortgage broker connects borrowers and lenders, while the mortgage lender - a bank or financial institution - deals directly with the borrower. Brokers can help you with comparison shopping for different rates and facilitate the application process.

Working with mortgage lenders directly means you are in full control of every step of the journey - and any associated hassle.

Brokers are usually paid on a fee-based schedule, while lenders make their money through a variety of different fees and charges. Origination fees and interest are major examples of how lenders are compensated.

Which is better for me?

Choosing between a mortgage broker or a direct lender depends on a number of factors and personal preferences. A broker can be the more convenient choice for many borrowers, as they handle the process of contacting different lenders to find a good fit. However, for those who want full control of the homebuying process, going straight to the bank might be a better choice.

Other considerations

One thing to keep in mind is some lenders work exclusively with mortgage brokers, and some brokers are exclusive with certain lenders. This could mean working with a broker may limit your choices of lender and vice versa.

However, if you place a high value on convenience, a mortgage broker can save you significant time and effort in the mortgage process. If you prefer contacting each direct lender to crunch the numbers yourself, skip the broker and work directly with a bank or institution of choice.

About the Author

Barbara Rybicki

I am originally from Poland but have been a Grafton resident for almost thirty years.

I come from the Hospitality Business. I used to work in 5 Star Marriott Hotel Management. That experience taught me how to provide excellent customer service. That "Marriott" way of doing business instilled in me over the years helps me tremendously to succeed as a local real estate broker.

Nothing is more exciting to me than gratifying feeling I get from helping people reach their real estate needs and dreams. You can count on me to always do what is in your best interest. I will be there for you throughout the entire transaction making sure you understand each step of the buying or selling process. I will guide you with great communication skills and hard work ethic.

I have not only passion for my job but also extensive real estate expertise. Whether it is preparing and staging your home to sell for top dollar or helping you purchase a perfect home, feel free to reach out to me so we can start this process together.

I specialize in marketing and selling residential real estate in Grafton, Upton, Northborough, Westborough, Southborough, Shrewsbury, Milford, Hopkinton and Metro West area.