Know the difference: Mortgage Brokers and Loan Officers

When you work on your application for a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. As a new home is the outcome of the work of both mortgage broker and mortgage banker, people usually confuse the two job types. But for the application process, it can help if you know how they are different.

What is a Mortgage Broker?

A mortgage broker (either a group or an individual) is an independent agent for both the mortgage loan applicant and the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which can be a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. Which lender has the mortgage loans that is right for you? A mortgage broker will guide you to the best fit. 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 closing. The borrower pays a commission to the broker upon closing.

What is a Mortgage Banker?

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to market, and process mortgage loans originated by that particular institution alone. There can be a wide range of loans types to choose from even though all are programs of that particular lender.

A loan officer (also called an "account executive" or "loan representative") acts on behalf of the borrower to the lending institution. The borrower is helped through the whole process, from loan selection to closing, by the loan officer. Lenders give their loan officers a commission or salary.

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