Know what to expect: Mortgage Brokers vs. Mortgage Bankers
When you're looking to get a mortgage loan, you should know the difference between a loan officer and a mortgage broker. Because both a mortgage broker and mortgage banker can help you fund your new home, it's understandable to confuse the two. Yet it will be helpful to recognize the difference between the two jobs so you have clear expectations of them during your mortgage application process.
A mortgage broker (either a group or an individual) is an independent agent for both the mortgage loan borrower and the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. A mortgage broker can review your financial situation to find out which lender is the best fit for you. From application to closing, your mortgage broker facilitates the loan process: submitting your loan application to a number of lenders, and coordinating the process with the lender through to the closing of your loan. The broker gets a commission from the borrower when the loan closes.
Lending Institutions (banks, finance companies, and others) employ loan officers to market, and process loans solely from that particular institution. There may be an assortment of loans types to choose from although all are programs of that particular lending institution.
Also called a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lending institution. From selecting a loan to closing, a mortgage banker will help you through the process. Lending institutions compensate the mortgage bankers with a salary or commission.
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