Keep it small. The adage has followed Dustin Dimisa for years in the mortgage industry. He has seen many companies falter under their own weight. He has also seen some large entities succeed using the platforms they have built to highly efficient use while also keeping it personal.
Which is better? A small mortgage entity or a large brokerage?
The reality is that they both have their pros and cons. The best potential home buyer is one that is informed about these realities and finds a portal that fits their needs best. This is the reason for Consumer Connect. It is a platform developed by Dustin and his team to match clients with the right outlets for their home buying needs. Readers can find Dustin on Twitter at Twitter.com/dustindimisa1.
What are the basic differences between the two?
The basic differences are as follows. Direct lenders do not have any brokers to deal with. They can offer terms direct to the consumer because they are essentially creating the terms. They are avoiding the brokerage ties that keep broker transactions comparatively slower. A direct lender is supplying the funds, so they can be more discerning in what they allow and what stretches they make in the arrangement.
Is there a problem with direct lending?
Not all is well in direct lending. An honest look at the system will be helpful. Firstly, direct lending specializes in working with people who can’t go to traditional brokers often due to a low score. This means that their loans have risk aversion padded in. They may have higher interest rates or have shorter terms, such as 10-year fixed rate mortgages. This is not always the case, but it is a basic assessment.
Though the details above are true, direct lending has risen in popularity due to the tightening up of brokers and banks. It has forced customers to be innovative in how they approach a mortgage. Instead of saying they are out of luck, they are pursuing small local community companies. The demand has elevated direct lenders to a new peak. It has only benefited the borrower by giving them more options and more versatility in how they approach a loan.