Know the difference: Mortgage Brokers vs. Mortgage Bankers
When you apply for a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. As both yield the same outcome (a new home), it's understandable to confuse them. Yet it is beneficial to recognize the ways they differ so you have clear expectations of them during your mortgage process.
A mortgage broker is someone or firm that serves as 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, 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. A mortgage broker will review your finances to determine which lender is the right fit for you. From application to closing, your mortgage broker facilitates the loan process: presenting 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.
About Mortgage Bankers
Lending Institutions (banks, finance companies, and others) employ loan officers to promote, and process loans solely on behalf of that particular institution. Although a loan officer may market quite a range of loan programs, they will be products from that lender alone.
A loan officer represents you to the bank or other lending institution. From choosing a loan product to closing, a loan officer can walk a borrower through the process. Loan officers are paid a commission or salary for their work by their employers.
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