Mortgage Broker vs. Mortgage Banker
When it comes to locating a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. Because both a mortgage broker and lending officer can help you fund your new home, it's easy to confuse the two. But as you enter your application process, it will help if you understand how they are different.
What is a Mortgage Broker?
A mortgage broker (either a firm or an individual) is an independent agent for both the mortgage loan borrower and the lender. 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, 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 offers the loan programs that fits your financial situation? A mortgage broker will help you find the right one. From application to closing, your mortgage broker works with you: presenting your application to several lenders, and coordinating the process with the lender through to the closing of the loan. At closing, the broker's commission comes from the borrower.
About Loan Officers
Mortgage Bankers are representatives of a specific lending institution (such as a bank) who work with mortgages and other loan programs on behalf of their employer alone. Although a loan officer may market quite a range of loan programs, they are all programs with that particular lender.
Also known as a "loan representative" or "account executive," a loan officer represents the borrower to the lending institution. The borrower is guided through the entire process, from choosing a loan to closing, by the mortgage banker. Lenders give their mortgage bankers a salary or commission.
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