Know the difference: Mortgage Brokers and Mortgage Bankers
When you apply for a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. As both a mortgage broker and mortgage banker can help you fund your new home, people often confuse the two. But as you enter your application process, it will help if you recognize how they are different.
About Mortgage Brokers
A mortgage broker is someone or company that is an independent agent for the mortgage loan borrower as well as the lender. Your mortgage broker will stand as coordinator between you and the lending institution; which can be a bank, trust company, credit union, mortgage corporation, finance company or even an individual, private investor. Which lender has the loan programs that is right for you? A mortgage broker will guide you to the best one. You give your loan application to your broker, who offers it to one or more lenders. Your mortgage broker then assists your work with the lender chosen until the loan closes. At closing, the broker's commission is given by the borrower.
Lending Institutions (banks, finance companies, and others) employ loan officers to promote, and process mortgage loans solely originated by that particular institution. There can be a wide range of loans types to choose from even though all are products of that particular lending institution.
Your loan officer represents you to the bank or other lending institution. From finding a loan to closing, a mortgage banker will walk you through the process. Either a salary or commission is paid to mortgage brokers by their employers.
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