Know the difference: Mortgage Brokers vs. Mortgage Bankers
When you apply for a mortgage loan, you should know the difference between a mortgage banker and a mortgage broker. People frequently confuse these as both will give the same result: a new home. Yet understanding the differences between them will be useful to the mortgage loan process.
A mortgage broker is a person or group that is an independent agent for both the mortgage loan borrower 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 an individual investor. A mortgage broker can review your numbers to find out which lender is the best fit for your loan needs. From application to closing, your mortgage broker facilitates your loan process: submitting your application to several lenders, and walking you with the chosen lender through to closing. Upon closing, the broker's commission is paid by the borrower.
What is a Loan Officer?
Lending Institutions (banks, finance companies, and others) employ loan officers to market, and process mortgage loans on behalf of that particular institution alone. They may be able to market loans to fit many different situations, but all the loans will be products from the same lender.
A loan officer (also called an "account executive" or "loan representative") acts on behalf of the borrower to the lending institution. From choosing a loan to closing, a mortgage banker will walk you through the process. Either a salary or commission is paid to loan officers by their employers.
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