Know what to expect: Mortgage Brokers vs. Mortgage Bankers
When it's time to locate a mortgage , you need to know the difference between a mortgage broker and a loan officer. Because both yield the same outcome (a new home), it's understandable to confuse them. But as you begin the application process, it can benefit you if you understand how they differ.
During the mortgage loan process, an individual or firm who is an independent agent for both mortgage loan borrower and lender is a mortgage broker. A mortgage broker facilitates 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, 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 a private investor. Which lender has the mortgage loans that fits your needs? A mortgage broker will guide you to the right one. You deliver your loan application to your broker, who submits it to several lenders. Your mortgage broker then helps you work with the lender chosen until the closing of the loan. Upon closing, the broker's commission comes from the borrower.
About 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 process loans only originated from that institution. They may be able to market loans to fit a variety of situations, but all the loans will be products from the same lender.
A mortgage banker (also known as an "account executive" or "loan representative") represents the borrower to the lending institution. From finding a loan program to closing, a mortgage banker can guide you through the process. Lending institutions compensate the mortgage bankers with a commission or salary.
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