Mortgage Broker or Mortgage Banker
When you need a mortgage loan, you should know the difference between a mortgage broker and a mortgage banker. As a new home is the result of the work of both mortgage broker and mortgage banker, people often confuse the two. However, it will be important to understand the difference between the two jobs so you have clear expectations of them as you enter the mortgage application process.
A mortgage broker is an individual or group that is an independent agent for the mortgage loan borrower as well as the lender. A mortgage broker coordinates things between you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company 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, private investor. You use a mortgage broker to consider your financial circumstance and find the lender who has the best mortgage loan for you. Your broker will submit your mortgage application to a handful of lenders, and works with the lender of choice until closing. The borrower pays a commission to the broker at closing.
What is a Loan Officer?
The main difference between a mortgage broker and a loan officer is that the latter works for a lending institution (a bank, credit union, or others) to promote and process loans solely originated from that institution. They may have the ability to market loans to fit many different situations, but all the loans are programs from the same lender.
Your loan officer represents you to the bank or other lending institution. The borrower is helped through the whole process, from loan selection to closing, by the loan officer. Lenders compensate their loan officers with a commission or salary.
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