Know what to expect: Mortgage Brokers and Mortgage Bankers
When it's time to apply for a mortgage , you should know the difference between a loan officer and a mortgage broker. It's understandable to confuse the two job types as both will reap the same result: a new home. But for the application process, it can benefit you if you understand how they differ.
A mortgage broker (either a firm 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 may be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. Which lender offers the loans that fits your needs? A mortgage broker will help you find the right fit. From application to closing, your mortgage broker works with you: submitting your mortgage application to several lenders, and coordinating the process with the lender through to closing. The broker receives a commission from the borrower at closing.
What is a Loan Officer?
The most important difference between a mortgage broker and a mortgage banker is that a loan officer works for a lending institution (a bank, credit union, or others) to promote and process loans only originated from that institution. They may have the ability to offer loans to fit many different situations, but all the loans will be programs of the same 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 choosing a loan to closing, by the loan officer. Either a salary or commission is paid to loan officers by their employers.
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