Know what to expect: Mortgage Brokers and Loan Officers

When it's time to locate a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. Since a new home is the outcome of the work of both mortgage broker and loan officer, people sometimes confuse them. However, it will be valuable to understand how they differ so you have clear expectations of them as you enter your mortgage process.

What is a Mortgage Broker?

A mortgage broker is someone or firm that is an independent agent for the mortgage loan applicant as well as the lender. A mortgage broker coordinates things between 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 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. You use a mortgage broker to look at your financial circumstance and find the lender who has the best loan program for you. From application to closing, your mortgage broker facilitates the loan process: offering your application to a number of lenders, and walking you with the chosen lender through to closing. The borrower gives a commission to the broker if the loan closes.

What is a Mortgage Banker?

The most important difference between a mortgage broker and a loan officer is that a loan officer works for a lending institution (a bank, credit union, or others) to process loans only originated from that institution. Although a mortgage banker may offer quite a range of loans, they will be products of that lender alone.

Your loan officer represents you to the bank or other lending institution. From selecting a loan product to closing, a mortgage banker can guide a borrower through the process. Mortgage bankers will be paid a commission or salary for their work by their employers.

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