Know the difference: Mortgage Brokers vs. Mortgage Bankers
Either a mortgage broker or a loan officer may assist you when it's time to locate a mortgage . Because both reap the same result (a new home), it's understandable to confuse the two job types. However, knowing how they differ is beneficial to your mortgage loan process.
A mortgage broker is a person or group that is an independent agent for the mortgage loan applicant as well as 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 look at your financial circumstance and lead you to the lender who has the right loan program for you. You deliver your application to your broker, who submits it to one or more lenders. Your mortgage broker then guides your work with the lender of choice until closing. The borrower gives a commission to the broker at closing.
Lending Institutions (banks, finance companies, and others) employ mortgage bankers to offer, and process loans originated by that particular institution alone. There may be a variety of loans types to choose from even though all are products of that specific lending institution.
Also called a "loan representative" or "account executive," a loan officer represents the borrower to the lender. From choosing a loan to closing, a mortgage banker will walk the borrower through the process. Either a salary or commission is given to loan officers by their employers.
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