Know the difference: Mortgage Brokers and Mortgage Bankers
When it comes to applying for a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. It's understandable to confuse them since both will yield the same result: a new home. However, knowing the differences between them is advantageous to your mortgage process.
A mortgage broker is someone or company that is an independent agent for the mortgage loan applicant as well as the lender. A mortgage broker facilitates things between you and your lender, which can be one of the following: a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. You use a mortgage broker to consider your financial circumstance and lead you to the lender who has the right loan program for you. Your broker will present your mortgage application to various lenders, and works with the lender of choice until the loan closes. The borrower submits a commission to the broker when the loan closes.
Mortgage Bankers are representatives of a particular lending institution (such as a bank) who work with mortgages and other loan products from their company alone. Although a mortgage banker may offer quite a variety of loans, they will be programs from that lender alone.
Also called a "loan representative" or "account executive," a loan officer represents the borrower to the lending institution. From choosing a loan program to closing, a mortgage banker can help the borrower through the process. Lending institutions compensate their mortgage bankers with a commission or salary.
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