Mortgage Broker vs. Mortgage Banker
Either a mortgage broker or a mortgage banker may assist you when you need a mortgage loan. People frequently confuse them because both will yield the same result: a new home. However, recognizing how they differ is important to your mortgage process.
About Mortgage Brokers
A mortgage broker is someone or company that serves as an independent agent for both the mortgage loan applicant and the lender. Your mortgage broker will stand as coordinator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. You use a mortgage broker to review your financial situation and lead you to the lender who has the best loan program for you. You deliver your application to your broker, who offers it to several lenders. Your mortgage broker then helps you work with the lender chosen until the closing of the loan. Upon closing, the broker's commission comes from the borrower.
About Loan Officers
The biggest difference between a mortgage broker and a mortgage banker is that a mortgage banker works on behalf of a lending institution (a bank, credit union, or others) to process loans only originated from the products of that institution. They may have the ability to promote loans to fit a variety of situations, but all the loans will be products from the same lender.
Your loan officer represents you to the bank or other lending institution. From selecting a loan to closing, a loan officer will walk you through the process. Lending institutions give their mortgage bankers a salary or commission.
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