Know the difference: Mortgage Brokers and Mortgage Bankers

Either a mortgage broker or a loan officer may work with you when you're looking to get a mortgage . Because a new home is the result of the work of both mortgage broker and loan officer, people usually confuse the two. But as you enter the application process, it will benefit you if you know how they differ.

Mortgage Brokers

During the mortgage loan process, an individual or company who is an independent agent for the mortgage loan borrower as well as the lender is a mortgage broker. 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 a private investor. You partner with a mortgage broker to review your financial circumstance and find the lender who has the best loan program for you. You give your mortgage application to your broker, who presents it to a number of lenders. Your mortgage broker then helps you work with the lender chosen until the closing of the loan. The broker gets a commission from the borrower at closing.

What is a Loan Officer?

The biggest difference between a mortgage broker and a loan officer is that the latter is employed by a lending institution (a bank, credit union, or others) to process loans only from the programs of that institution. They may have the ability to offer loans to fit many different situations, but all the loans will be products from the same lender.

Your mortgage banker represents you to the bank or other lending institution. The borrower is guided through the whole process, from loan selection to closing, by the loan officer. Either a salary or commission is paid to loan officers by their employers.

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