Know the difference: Mortgage Brokers vs. Loan Officers
Either a mortgage broker or a mortgage banker can assist you when you work on your application for a mortgage loan. As a new home is the outcome of the work of both mortgage broker and loan officer, it's understandable to confuse them. But as you enter your application process, it will help if you understand they ways they differ.
What is a Mortgage Broker?
A mortgage broker (either a group or an individual) is an independent agent for the mortgage loan borrower 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 a private investor. A mortgage broker will examine your financial situation to find out which lender is the best fit for you. You deliver your application to your broker, who offers it to one or more lenders. Your mortgage broker then assists your work with the lender chosen until the loan closes. The borrower gives a commission to the broker at closing.
Lending Institutions (banks, finance companies, and others) employ mortgage bankers to promote, and process mortgage loans from that specific institution alone. They may have the ability to market loans to fit a variety of situations, but all the loans are products from the same lender.
Also known as a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lender. From finding a loan product to closing, a loan officer can walk you through the process. Lenders pay their loan officers a commission or salary.
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