Know what to expect: Mortgage Brokers and Mortgage Bankers
When you work on your application for a mortgage , you should know the difference between a mortgage broker and a loan officer. People frequently confuse the two because both will give the same outcome: a new home. However, understanding the ways they differ will be important to your mortgage process.
About Mortgage Brokers
A mortgage broker is an individual or firm that acts as an independent agent for the mortgage loan borrower as well as the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. A mortgage broker can look at your numbers to find out which lender is the right fit for your loan needs. Your broker will present your mortgage loan application to a handful of lenders, and works with the lender of choice until the loan closes. The broker receives a commission from the borrower if the loan closes.
Lending Institutions (banks, finance companies, and others) employ mortgage bankers to promote, and process loans from that specific institution alone. They may be able to offer loans to fit a variety of situations, but all the loans will be products from the same lender.
A loan officer (also known as an "account executive" or "loan representative") acts on behalf of the borrower to the lender. A mortgage banker will guide the borrower through the selection, processing and loan closing. Lenders give their mortgage bankers a salary or commission.
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