Direct mortgage -- various definitions come into play when discussing this term. Before computer technology and online services were readily accessible, a direct mortgage would simply mean a mortgage direct between the direct lender and the direct borrower with no intermediary parties. The line between “no intermediary parties” and true direct loans has become blurred because often direct lenders who claim to be direct mortgage companies are actually only direct because they offer the loan to a customer direct, through online mortgages, but the direct lender actually receives the loan from another supplier.

Most mortgage companies that say they can give you a direct mortgage, most likely mean that there will be no third-party charges or third-party dealers to take into consideration or to concern yourself with contacting. The downfall of dealing with a direct mortgage company may be that you are not offered a variety of direct competitive rates upon applying for your direct loan. Since the mortgage company deals directly with you, they will not go to different lenders to try and get different deals and interest rates. On the upside though, direct dealings with the mortgage company often means more personalized service because your mortgage is not being shuffled around between lenders, brokers, or underwriters who are trying to evaluate your mortgage application. When the time comes to ask questions regarding your mortgage, you will be dealing with the mortgage company in a direct manner, so finding answers may be easier.

So how do you determine if you are receiving a direct loan and why does it make a difference in financing your home mortgage? By using a direct mortgage company, you may shorten the time between putting a bid in for the home and the closing date because the direct mortgage company has more control over choosing borrowers to provide with mortgages since there is no third party interference. What happens if there is a third party lender or mortgage broker involved, is that the mortgage company who the direct borrower applied with also has their hands tied until the third party gives direct approval of the mortgage. This means your mortgage application has to go through more hands, and will inevitably take a longer time to receive.

A mortgage company that usually deals with a third party dealer usually deals with many mortgage companies to determine who will provide the best mortgage lead, or deal for the borrower. This can be both a positive and a negative factor for the direct borrower.

If you are going through a direct loan company who can offer a direct mortgage that will be the direct company you deal with from here on out. Since these companies are smaller though, there may be a chance that they do not survive the market and then your direct mortgage could be sold to another company. On the other hand, going through third party lenders usually means those lenders do not put as much value or stock into you as a customer and would be willing to sell your mortgage to another lender or broker if the opportunity arose. Although selling mortgages did not used to be a concern, because the market has boomed significantly, and real estate prices are high, there is more concern for larger mortgage companies who have staying power over the smaller, more direct mortgage companies.

Direct does not always mean small however, because many large banks and financial corporations are now offering direct online mortgage services. This can make your direct loan decision even more difficult because filling out the direct mortgage application online is a fairly easy process, which is drawing the attention of many direct mortgage customers because of the advantage of privacy and accessibility.