Direct lender or broker: who you are talking to, and why it matters
A HomeSec presenter on what business owners want from a lender, straight answers and fast decisions, and the difference between dealing with the lender that funds the loan and a broker who places it.
- A direct lender assesses, decides and funds the loan itself. A broker compares lenders and places the application with one of them.
- With a direct lender, the person on the phone can say what the credit team will want, because the credit team is in the same business.
- A good broker earns their place when several lenders could fit and someone needs to compare them. HomeSec works with brokers as well as directly with business owners.
- Either way, ask two things: who makes the decision, and when every cost will be in writing.
What the presenter says
The video opens on the card "Why business owners choose HomeSec" and makes a simple point about what people want from a lender. Not complexity: straight answers, fast decisions and a lender that actually funds the loan. HomeSec, the presenter says, is not a broker passing people from one place to the next or selling maybes. It lends. The video is 29 seconds long, and the distinction it draws is worth more time than that.
The difference, in practice
A broker is an intermediary. They take your details, work out which lenders' policies fit, submit the application and manage it through to settlement. The decision belongs to whichever lender they choose, and the broker learns it when you do. A direct lender removes that step. The person you speak to works for the business that will assess the file, approve it and release the money, so a first conversation can end with an indicative answer rather than a promise to find out.
HomeSec goes one step further than some direct lenders, because it lends its own money. There is no bank or fund behind it whose policy has to be checked before a yes, which is the point the written guide to private lenders in Australia makes in its section on lending one's own money. A person decides every loan, and that person is part of the same business you rang.
Where a broker earns their place
None of this makes a broker the wrong choice. A broker who knows the market is useful when several lenders could do the deal and the borrower wants them compared, when the finance spans more than one product, or when the borrower simply wants one person managing the whole process. HomeSec works with mortgage and finance brokers, and has a page for them explaining how a scenario reaches the credit team. The role play in Broker A or Broker B? shows what a good one does with a client who needs money quickly.
Four questions to ask, whoever you call
- Who makes the credit decision, and is it a person?
- Whose money is being lent? A lender's own, a bank's, or a fund's.
- When will every cost be in writing? Before you pay anything or sign anything is the right answer.
- What happens if the loan needs more time? At HomeSec, extra time carries no fee, though it is assessed and confirmed in writing first.
Questions people ask next
Is it cheaper to go direct than through a broker?
Can my broker send my loan to HomeSec?
How can I tell whether I am speaking to a lender or a broker?
The video is the short version. The written guide has the detail: private lenders in Australia.
To talk it through about your own property, ring a Lending Manager on 1300 93 83 87, Mon–Fri, 8:30am – 5:30pm Melbourne time.
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Reviewed by Jason Brockmuller, Joint Chief Executive