When financing a home, it’s important to work with a company you know, like, and trust. While there are many mortgage companies, not all are the same; some are direct mortgage lenders and others are big banks. Both offer home loan services. At Direct Mortgage Loans, we are a direct mortgage lender that specializes in direct, personalized, and quick* loans to make homeownership available to you! Get a FREE quote with us today

In this article, we will discuss the pros and cons of a direct lender and a big bank in terms of a mortgage loan. 


Direct Mortgage Lenders 

Direct lenders are “financial institutions that originate, process, and fund the loans themselves” (themortgagereports). There are many pros and cons to working with a direct lender. 

Direct lenders can make the whole home loan process very quick and efficient. Since direct lenders require fewer third parties and less paperwork, this calls for a more efficient process. Direct lenders may be able to provide an instant preapproval process, instant loan decisions, and faster turnover times. 

Direct lenders tend to lend to a wider range of borrowers. Where banks may turn applicants down based on more strict criteria, direct lenders are able to work with applicants and find loopholes to provide a successful loan. 

Direct lenders create a more personable financial experience. At Direct Mortgage Loans, our loan officers work hard to continue a lifelong relationship with clients as their mortgage advisors! You will have direct contact with your loan officer during and after your loan process. 

Many direct lenders work to create new programs and products to meet homebuyers’ needs in the current market. 

The focus of a direct lender is the client and making homeownership possible for them through their mortgage services. The professional you work with will create a trustworthy relationship with you. In the stress of finding a home and moving, the last thing you want to do is stress about your rate and mortgage loan. With a loan officer you trust, you can relax knowing that they are working to find the best solution for you.  


Big Banks 

Large banks also lend money to borrowers to buy a home- a mortgage loan. “Big banks are large, multi-billion-dollar financial institutions that offer a wide range of financial products such as deposit accounts and credit cards, in addition to mortgages” (freeandclear).  

Since big banks are large institutions, they have the financial means to potentially offer lower interest rates. This is beneficial if you clearly meet and exceed the criteria for pre-approval. A lower interest rate means a lower monthly mortgage payment. 

Since big banks are direct lenders, they handle the whole process from start to finish. They do not rely on any outside institutions for any part of the home loan funding process. This can create an efficient process for having your loan closed. 

However, while big banks can potentially offer a lower rate there are major downsides. One is that your business may be perceived as just a number. They are “big banks” for a reason and have millions of customers. Unlike a loan officer at a direct lender, big banks may not have the time or the bandwidth to provide customized mortgage solutions. 

In addition, big banks may have stricter requirements and there may not be as many out-of-the-box exceptions or workarounds for approval eligibility. If you do not have the stated credit score, down payment, and income a big bank requires, you may be turned down. 


Direct Mortgage Lenders vs. Big Banks 

All in all, both direct mortgage lenders and big banks offer mortgage loans. The crucial distinction is that a direct mortgage lender will prioritize your business and will work to find solutions for your current financial portfolio. Big banks tend to be more institutionalized lenders and may have a less personalized service. To work with a direct lender who will prioritize your personal mortgage goals, contact Direct Mortgage Loans!