Know the difference: Mortgage Brokers vs. Mortgage Bankers
Either a mortgage broker or a mortgage banker can work with you when it's time to locate a mortgage . Since both a mortgage broker and mortgage banker will help you purchase your new home, people sometimes confuse them. However, it will be useful to recognize the ways they differ so you know what to expect from them as you enter your mortgage application process.
What is a Mortgage Broker?
During the mortgage loan process, an individual or firm who is an independent agent for both mortgage loan applicant and lender is a mortgage broker. A mortgage broker facilitates things for 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, private 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 an individual, private investor. A mortgage broker can look at your finances to determine which lender is the best fit for your loan needs. Your broker will offer your mortgage loan application to a handful of lenders, and works with the lender of choice until the loan closes. The broker receives a commission from the borrower at closing.
The most important difference between a mortgage broker and a loan officer is that a loan officer works on behalf of a lending institution (a bank, credit union, or others) to process loans solely from the programs of that institution. They may be able to market loans to fit many different situations, but all the loans are programs from the same lender.
Your loan officer will represent you to the bank or other lending institution. The borrower is walked through the whole process, from loan selection to closing, by the mortgage banker. Either a salary or commission is given to loan officers by their employers.
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