Know the difference: Mortgage Brokers vs. Mortgage Bankers
When it's time to locate a mortgage , you need to know the difference between a mortgage banker and a mortgage broker. As both a mortgage broker and lending officer can help you purchase your new home, people can confuse the two. But as you enter your application process, it will benefit you if you understand their differences.
About Mortgage Brokers
During the mortgage loan process, an individual or company who is an independent agent for the mortgage loan applicant as well as the lender is a mortgage broker. Your mortgage broker will stand as coordinator between you and the lending institution; which can be a bank, trust company, credit union, mortgage corporation, finance company or even an individual, private investor. A mortgage broker will look at your numbers to find out which lender is the right fit for your loan needs. You deliver your application to your broker, who presents it to one or more lenders. Your mortgage broker then helps you work with the lender of choice until closing. The broker receives a commission from the borrower when the loan closes.
Loan officers are representatives of a particular lending institution (such as a bank, credit union, etc.) who promote and process mortgages and other loan products for their place of employment alone. There can be an assortment of loans types to choose from although all are programs of that specific lender.
Also known as a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lender. The borrower is guided through the whole process, from selecting a loan to closing, by the mortgage banker. Lenders compensate the loan officers with a salary or commission.
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