Today, the mortgage industry is filled with numerous companies and individuals that help people borrow money for their biggest life investments. You will generally find two sources in the market: a mortgage broker and a lender. Although both equally help you get a mortgage, they are very different in how they operate.
Mortgage Lenders
A mortgage lender is a financial institution — a bank, credit union, or mortgage company — that directly provides loan funds to borrowers. When you get a mortgage from a lender, you're working directly with the institution that will own or service your loan.
Lenders have their own set of loan products and underwriting guidelines. The advantage is that you deal directly with the decision-maker. The disadvantage is that you're limited to that institution's products and rates.
Mortgage Brokers
A mortgage broker acts as an intermediary between you and multiple lenders. Brokers shop your application to a variety of lending sources and can often find more competitive rates or more flexible terms than going directly to a single lender.
Brokers are particularly valuable if your financial situation is non-standard — self-employed income, unusual property types, or credit challenges that require a lender who specializes in that niche.
The Truth In Equity perspective
When it comes to implementing a CLB strategy, the type of lender matters less than the product. What you need is a lender who can provide a HELOC on favorable terms — and having a broker who can shop multiple HELOC sources can make a significant difference in your program performance. We work with clients to identify the right lending partners for their specific situation.
