Mortgage Broker vs. Loan Officer
When it comes to locating a mortgage , you may work with a mortgage banker or you may choose to work with a mortgage broker. Because both a mortgage broker and mortgage banker can help you buy a new home, it's understandable to confuse the two. But for the application process, it can benefit you if you know how they differ.
What is a Mortgage Broker?
A mortgage broker (either a group or an individual) is an independent agent for both the mortgage loan applicant and the lender. A mortgage broker coordinates things for you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company or even a private 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 an individual, private investor. A mortgage broker will consider your financial situation to find out which lender is the right fit for you. From application to closing, your mortgage broker facilitates your loan process: submitting your mortgage application to a number of lenders, and walking you with the chosen lender through to closing. The borrower gives a commission to the broker when the loan closes.
What is a Mortgage Banker?
The biggest difference between a mortgage broker and a loan officer is that a mortgage banker works for a lending institution (a bank, credit union, or others) to offer and process loans only originated from the products of that institution. There may be an assortment of loans types to choose from, but all are programs of that particular lender.
A mortgage banker (also known as an "account executive" or "loan representative") represents the borrower to the lending institution. A mortgage banker will help you through the application, processing and loan closing. Lending institutions compensate their mortgage bankers with a salary or commission.
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