Know the difference: Mortgage Brokers vs. Mortgage Bankers

Either a mortgage broker or a mortgage banker may work with you when you work on your application for a mortgage . Because both produce the same result (a new home), people often confuse the two. However, it is useful to know the ways they differ so you have clear expectations of them during the mortgage application process.

About Mortgage Brokers

During the mortgage loan process, an individual or firm who is an independent agent for the mortgage loan applicant 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 bank, trust company, credit union, mortgage corporation, finance company or even an individual, private investor. Which lender has the loans that fits your financial situation? A mortgage broker will help you find the right one. Your broker will present your mortgage loan application to one or more lenders, and works with the lender of choice until closing. The broker is given a commission from the borrower upon closing.

About Loan Officers

The main 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 promote and process loans only originated from the programs of that institution. They may be able to market loans to fit a variety of situations, but all the loans are programs from the same lender.

A mortgage banker (also known as an "account executive" or "loan representative") represents the borrower to the lending institution. A loan officer can guide you through the application, processing and loan closing. Either a salary or commission is paid to loan officers by their employers.

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