Know what to expect: Mortgage Brokers and Mortgage Bankers
Either a mortgage broker or a mortgage banker may assist you when you apply for a mortgage loan. Because both a mortgage broker and mortgage banker can help you purchase your new home, it's easy to confuse them. However, it will be valuable to understand how they differ so you have clear expectations of them as you enter your mortgage application process.
A mortgage broker is a person or firm that is an independent agent for both the mortgage loan borrower and the lender. Your mortgage broker will stand as coordinator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. You partner with a mortgage broker to look at your financial situation and lead you to the lender who has the best loan for you. You deliver your mortgage loan application to your broker, who submits it to a number of lenders. Your mortgage broker then assists your work with the lender chosen until the closing of the loan. At closing, the broker's commission is paid by the borrower.
Loan officers are representatives of a particular lending institution (such as a bank) who process mortgages and other lending programs on behalf of their company alone. They may have the ability to market loans to fit many different situations, but all the loans will be products of the same lender.
A mortgage banker (also known as an "account executive" or "loan representative") represents the borrower to the lender. The borrower is walked through the entire process, from finding the loan to closing, by the loan officer. Lending institutions pay their loan officers a salary or commission.
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