Know the difference: Mortgage Brokers and Mortgage Bankers
When you need a mortgage , you should know the difference between a mortgage banker and a mortgage broker. Since both reap the same result (a new home), people frequently confuse the two. Yet it will be beneficial to understand how they differ so you know what to expect from them during your mortgage application process.
About Mortgage Brokers
A mortgage broker is someone or company that acts as an independent agent for the mortgage loan borrower as well as the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which can be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. Which lender has the loans that is right for you? A mortgage broker will lead you to the right one. Your broker will offer your mortgage application to one or more lenders, and works with the chosen lender until the loan closes. At closing, the broker's commission comes from the borrower.
What is a Mortgage Banker?
The most important difference between a mortgage broker and a mortgage banker is that the latter is employed by a lending institution (a bank, credit union, or others) to process loans only originated from that institution. They may be able to market loans to fit a variety of situations, but all the loans are products from the same lender.
Your mortgage banker represents you to the bank or other lending institution. The loan officer will walk you through the selection, processing and loan closing. Mortgage bankers can be paid a commission or salary for their services by their employers.
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