Know the difference: Mortgage Brokers vs. Loan Officers

When you apply for a mortgage , you may work with a mortgage banker or you may choose to work with a mortgage broker. Because both give the same result (a new home), it's understandable to confuse the two. But for your application process, it can help if you recognize how they are different.

About Mortgage Brokers

During the mortgage loan process, an individual or group who is an independent agent for the mortgage loan borrower as well as the lender is a mortgage broker. 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 credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. Which lender offers the mortgage loans that fits your needs? A mortgage broker will help you find the best one. 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 borrower pays a commission to the broker upon closing.

Mortgage Bankers

The biggest difference between a mortgage broker and a loan officer is that a mortgage banker is employed by a lending institution (a bank, credit union, or others) to promote and process loans only from the products of that institution. There can be a wide range of loans types to choose from, but all are programs of that specific lender.

Also known as a "loan representative" or "account executive," a mortgage banker represents the borrower to the lending institution. From selecting a loan product to closing, a loan officer can help the borrower through the process. Lenders give their loan officers a salary or commission.

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