Know what to expect: Mortgage Brokers vs. Loan Officers

When it comes to applying for a mortgage , you need to know the difference between a mortgage broker and a mortgage banker. As a new home is the outcome of the work of both mortgage broker and mortgage banker, it's understandable to confuse the two job types. However, it will be beneficial to recognize how they differ so you have clear expectations of them as you enter your mortgage application process.

About Mortgage Brokers

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 coordinates things for 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 credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. You work with a mortgage broker to examine your financial situation and find the lender who has the right loan program for you. Your broker will present your mortgage loan application to several lenders, and works with the lender of choice until the loan closes. The broker receives a commission from the borrower at closing.

Mortgage Bankers

Mortgage Bankers are representatives of a particular lending institution (such as a bank, credit union, etc.) who promote and process mortgages and other loans from their place of employment alone. They may have the ability to market loans to fit a variety of situations, but all the loans are products from the same lender.

A loan officer (also called an "account executive" or "loan representative") represents the borrower to the lending institution. A mortgage banker can guide you through the application, processing and closing of the loan. Loan officers are given a commission or salary for their work by their employers.

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