Should I go to a broker or a lender?

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There are a lot of companies in the mortgage industry that exist to help people acquire the finances needing to make one of the biggest financial commitments of their lives. The two most important entities in the industry are mortgage brokers and lenders. While they perform the same function of providing services to people looking for mortgage loans, there are a lot of differences between them. We will define and discuss both types of organizations to help you understand and decide which one works for you.

Mortgage Brokers

At the beginning of the home buying process you might decide to work with a mortgage broker. These brokers are financial professionals who act as an intermediary between individuals choosing to borrow and lenders. It is important to note that brokers are not lenders, as they do not use their funding to for mortgage loans.

Mortgage brokers aid homebuyers in the process of getting a mortgage by performing actions such as information and document gathering from lenders for the sake of their homebuyer clients. This information can include important details such as income, tax returns, credit reports, and pay stubs.

Upon receiving relevant information and documentation from their clients, brokers then bring it to lenders to seek loan approval, while trying to find the best rates and quotes possible for their customers. Good brokers will provide as much helpful information to their clients as possible such as specifics on the best lender in certain areas as well as the different kinds of mortgages lenders offer and which ones might work best for you.


Direct lenders are financial institutions or banks that provide the actual loan for a mortgage. Some lenders may even be private companies that deal exclusively in financing mortgage loans, and often operate online.

Often times people borrowing choose lenders that they already have a pre-established relationship with. Having a history with a certain lender can help you secure a better, bigger mortgage loan with a more favorable interest rate. Some banks in Ireland such as KBC even provide a lower interest rate for customers who already have accounts.

Important Considerations

  • Mortgage brokers provide an outlet to aid in the process of contacting many different banks trying to look for good rates, lenders do not.
  • Some lenders work exclusively with specific mortgage brokers and vice versa.
  • Increased regulations and consumer protection laws have made mortgage brokerages a trustworthy alternative to going to a lender directly if you feel you need help making sense of the whole mortgage loan seeking process.
  • Using a mortgage broker eliminates the need to shop around and look for the best rates from many different banks.