Broker vs direct lender — what’s your experience?

Question

For those who’ve worked with both direct lenders and brokers, what differences stood out to you?

Did having access to multiple lending options improve outcomes, or did you prefer dealing with one lender directly?

Erik Estrada · Answer

I think both have their pros and cons.

Direct lending will attract heavy hitters and brokered business. Your volume will be much higher, but the trade-off is a normal 9-5 salary with .30-.50 bps in compensation per file closed. Not bad if you want to clock in and clock out.

Being a broker is better suited for originators that like to work independently, control their workflow, and like to offer an array of options. You will most likely work with the clients that were denied by direct lenders or capture realtor business. You also make more money per file closed, 100-300bps per file closed. The trade-off is constantly grinding to find new business, deals can fall out, and you can burn out fast since you are working around your client's schedules.

I don't think there is a better option. It just depends on how you like to work. You can make great money with either or.

Andrew Zamboroski · Answer

Well said!

Ryan Muska · Answer

Working as a broker has been much better experience. More flexibility for programs and rates for clients.

Andrew Postell · Answer

@Tracy Thielman since you are a lender asking this, are you asking about your personal career type of thing?  Or are you asking about an investor working with these outlets?

Broker vs direct lender — what’s your experience?

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