Know the difference: Mortgage Brokers and Mortgage Bankers
Either a mortgage broker or a mortgage banker can work with you when you apply for a mortgage . As both give the same outcome (a new home), it's easy to confuse the two. However, knowing how they differ will be helpful to your mortgage loan process.
A mortgage broker (either a group or an individual) is an independent agent for both the mortgage loan borrower and 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 investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. A mortgage broker will look at your financial situation to determine which lender is the right fit for you. From application to closing, your mortgage broker facilitates your loan process: submitting your application to a number of lenders, and walking you with the chosen lender through to closing. The borrower submits a commission to the broker if the loan closes.
About Mortgage Bankers
The most important difference between a mortgage broker and a mortgage banker is that a mortgage banker works for a lending institution (a bank, credit union, or others) to market and process loans solely originated from the programs of that institution. They may be able to market loans to fit a variety of situations, but all the loans will be programs from the same lender.
Your loan officer represents you to the bank or other lending institution. From choosing a loan program to closing, a loan officer will help you through the process. Lenders compensate the mortgage bankers with a salary or commission.
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