Lately I’ve had a lot of questions and concerns from clients and Realtors in the CA Bay Area real estate market place about the difference between a "Direct Lender" a "Retail Lender" and a "Wholesale Broker" What are the main differences and benefits of working with one or the other?
Last a checked almost 60% of the Mortgage Loans that close in California are done through a Wholesale Broker. The reason why is very simple. A retail lender like your Wells Fargo or Bank of America on the corner has a very small box to fit you and your loan into. Retail banks are great for your savings and checking however when it comes to your retirement most talk to a professional certified financial planner right? Most employees at a retail bank are not versed and or certified to really give advice on such things. The same applied to a loan. You really should speak to a seasoned pro not a bank teller right?
You see Brokers have the ability to get you through the loan process better than a retail lender and at the end of the day they can offer more options in getting you the money you really need for your Real Estate. They are also the best educated and regulated option when choosing a lender. Not to mention a Broker will usually hands down have the most options and best pricing available for most loan scenarios.
Here are the top five reasons a Broker has more interest to do a great job compared to a Retail Lender.
- Loan Officers at retail lenders don’t have to go through the training and licensing a Broker does. This in turn makes brokers
more like a consultant instead of an application taker and an employee counting on a paycheck. Loan Officers that work for retail lenders are not required to be licensed with NMLS or DRE in turn making them less like experts.
- When you work with a broker with several lending relationships like I have you have more options, better rates and pricing are available.
- Also, if something should go wrong with your loan a Broker can take the file to several other sources that can close it. If a loan is denied for any reason at a retail lender the file is dead and you cannot move forward.
- All mortgage companies lend “direct” However every mortgage made in today’s market gets sold on the secondary mortgage market and end up at Fannie Mae and Freddie Mac unless you are working with a private portfolio lender (I work with several)
- Lastly and probably most important… a Broker does not work for any one bank. We work strictly to get my clients the best loan and the best terms. Retail lenders use “employees” that must be loyal to the bank first before the client otherwise they loose their paycheck job… A Wholesale Broker will only be paid if he does a great job and delivers a closed loan for the buyer thus making our incentive to a better job.
Bottom line we offer a higher level of availability, expertise, and lending options than Wells Fargo or any other Retail lender can even come close to 9 out of 10 times. We always offer the absolute best rates, and to top this off we are now offering out closing guarantee for home purchases in the CA Bay Area in Walnut Creek, Pleasant Hill, Martinez, Concord and other surrounding cities in Contra Costa County. We would love to by your Bay Area Mortgage Broker of choice today!I hope this info help you see the difference between a Retail Lender and a Wholesale Broker. Let me know if you have an specific questions.
Or leave me a Comment Below Let me know your thoughts or your personal experience with your last Mortgage Loan. If you found this article helpful PLEASE share this on Facebook and your Social Networks!
Until Next time Here is to your success! Jason Wheeler