Online aggregators are lead generation websites. Brokers and Direct lenders usually pay top dollar to get access to your information so they could potentially earn you as a customer.
- Save you a lot of time with getting information on rates and prices
- You pay more to middlemen who broker your information reducing how good your deal can be
- Your information will be sold over and over again
- Once you pass your information you may potentially harm your credit. Be careful and make sure you read their privacy policies
- Lending Tree
Mortgage Broker or Loan Originators
Mortgage brokers are typically the middlemen who find you a match to work with and in return, they make what's called an origination fee ranging from (.5%-1.5% in commission). Usually, brokers work inside direct lenders or banks (see below).
- Saves you a lot of time
- Brokers can help you shop for lenders, compare rates, and compile your application, structure your loan.
- Costs are higher because of the broker's charge commission fees.
- Someone you know personally
Direct lenders (a.k.a wholesalers)
Direct lenders originate loans and sell them to Banks and Servicers for a fee. Since wholesalers concentrate on volume and output they can capture the best rates directly from the secondary market.
- Cheaper fees
- Cheaper rates
- Faster process
- Service level varies based on size, bigger has less time for you but better prices
- United Wholesale Mortgage
Banks & Credit Unions
Retail banks a.k.a. depository banks have a wide range of products they sell. Checking, savings, retirement accounts, they also offer credit cards.
- Feels easier because they already have a relationship with you
- Depending on your wealth they might bend over backward for you
- Typically have higher rates and costs due to higher overhead and office space
- Treat you more like just a number, little one on one time or hand holding
- Wells Fargo
- Flagstar Bank
- Bank of America