Mortgage Broker vs. Mortgage Banker
Either a mortgage broker or a loan officer may work with you when it comes to finding a mortgage loan. Since both give the same outcome (a new home), people sometimes confuse them. But for the application process, it will help if you know they ways they differ.
About Mortgage Brokers
A mortgage broker is a person or firm that works as an independent agent for the mortgage loan applicant as well as the lender. Your mortgage broker will stand as coordinator between you and the lending institution; which can be a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. You use a mortgage broker to look at your financial circumstance and find the lender who has the right loan program for you. Your broker will submit your loan application to a handful of lenders, and works with the chosen lender until the loan closes. The broker is given a commission from the borrower upon closing.
What is a Mortgage Banker?
Lending Institutions (banks, finance companies, and others) employ mortgage bankers to promote, and process mortgage loans solely on behalf of that specific institution. Although a mortgage banker may promote quite a variety of loans, they all are products from that specific lender.
Your loan officer represents you to the bank or other lending institution. The borrower is guided through the entire process, from finding the loan to closing, by the loan officer. Lenders compensate the loan officers with a commission or salary.
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