Direct Lender vs Bank Lender

[Mike Bonadies]

Hi BiggerPockets!

I have a question about Direct Lenders vs Bank/Broker Lenders. I'm a rookie and I'm trying to pick up a multi-unit/english-basement house to in order to save on my mortgage expense and get some PM experience. I'm shopping around for lenders and I've come across a new type of lender I haven't read much on - Direct Lenders. The direct lender that I spoke with said that using a direct lender gives your offer letter more credibility verses a bank lender since the do a full pre-approval verses what they said is a "BS" pre-approval from a bank/broker lender. They also mentioned that since they are a direct lender that they have a better pool of appraisers to use.

I was wondering if someone could help explain the pros/cons of using a direct lender verses a bank lender? Is what the individual I was speaking with saying something valid?

PS: I'm looking at getting a conventional loan product or using a FHA/203k product.

Best,

Mike 

[Michael Cohen]

Hi Mike,

I agree with Brendon. What is most important is that someone who understands the programs and guidelines has reviewed your supporting documentation (tax returns, pay stubs, bank statements, etc.), review your credit profile, and determine an accurate DTI ratio, and is confident that you are an eligible buyer. Whether that comes from a bank or direct lender is irrelevant.