Know the difference: Mortgage Brokers vs. Mortgage Bankers
Either a mortgage broker or a mortgage banker may help you when you need a mortgage . Because both a mortgage broker and lending officer will help you purchase a new home, people usually confuse them. However, recognizing the differences between them is helpful to the mortgage loan process.
What is a Mortgage Broker?
A mortgage broker is a person or company that is an independent agent for both the mortgage loan borrower 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 partner with a mortgage broker to examine your financial situation and find the lender who has the best mortgage loan for you. From application to closing, your mortgage broker facilitates your loan process: offering your mortgage application to several lenders, and coordinating the process with the lender through to the closing of your loan. The broker receives a commission from the borrower at closing.
About Mortgage Bankers
Lending Institutions (banks, finance companies, and others) employ mortgage bankers to promote, and process loans solely from that specific institution. Although a mortgage banker may offer quite a variety of loans, they all are programs with that particular lender.
A mortgage banker (also called an "account executive" or "loan representative") acts on behalf of the borrower to the lender. The borrower is helped through the whole process, from choosing a loan to closing, by the loan officer. Loan officers can be given a commission or salary for their services by their employers.
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