Know the difference: Mortgage Brokers vs. Mortgage Bankers
When you apply for a mortgage , you may work with a loan officer or you may choose to work with a mortgage broker. Since both produce the same outcome (a new home), people sometimes confuse the two job types. However, it will be valuable to understand the ways they differ so you know what to expect from them as you enter the mortgage application process.
Mortgage Brokers
A mortgage broker is an individual or group that is an independent agent for both the mortgage loan applicant and the lender. A mortgage broker facilitates 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 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 a private investor. Which lender offers the mortgage loans that fits your financial situation? A mortgage broker will lead you to the best fit. You deliver your loan application to your broker, who presents it to several lenders. Your mortgage broker then assists your work with the lender chosen until the loan closes. When the loan closes, the broker's commission is given by the borrower.
Mortgage Bankers
The biggest difference between a mortgage broker and a loan officer is that the latter works on behalf of a lending institution (a bank, credit union, or others) to process loans solely originated from that institution. They may be able to offer loans to fit a variety of situations, but all the loans will be programs of the same lender.
Your loan officer represents you to the bank or other lending institution. From finding a loan to closing, a loan officer will help you through the process. Either a salary or commission is paid to loan officers by their employers.
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