What is the role of a mortgage broker versus a direct lender?

What is the role of a mortgage broker versus a direct lender?

• A. A broker funds the loan themselves; a direct lender arranges loans from multiple lenders.
• B. A broker lends money directly from their own funds; a direct lender matches clients with banks.
• C. A broker supervises appraisals; a direct lender approves all loans.
• D. A broker arranges loans from multiple lenders; a direct lender funds the loan themselves; brokers may access more options.

Answer: (D)

A mortgage broker acts as an intermediary who connects you with multiple lenders to shop for loan options. They don’t fund the loan with their own money; instead, they gather quotes from various lenders, compare programs, and help you apply to several lenders to find the best terms. A direct lender, by contrast, provides the loan from their own funds and handles underwriting and funding in-house, offering a more streamlined path but with fewer lender options. Because brokers have access to a network of lenders, they can present a wider range of rates and programs, giving you more choices. The other descriptions mix up who funds the loan and who provides the products, which isn’t accurate.

A mortgage broker acts as an intermediary who connects you with multiple lenders to shop for loan options. They don’t fund the loan with their own money; instead, they gather quotes from various lenders, compare programs, and help you apply to several lenders to find the best terms. A direct lender, by contrast, provides the loan from their own funds and handles underwriting and funding in-house, offering a more streamlined path but with fewer lender options. Because brokers have access to a network of lenders, they can present a wider range of rates and programs, giving you more choices. The other descriptions mix up who funds the loan and who provides the products, which isn’t accurate.