Know what to expect: Mortgage Brokers vs. Mortgage Bankers
When you're looking to get a mortgage , you may work with a loan officer or you may choose to work with a mortgage broker. Because both yield the same outcome (a new home), people often confuse them. But as you begin the application process, it will help if you understand their differences.
About Mortgage Brokers
A mortgage broker is an individual or company that is an independent agent for both the mortgage loan borrower and the lender. A mortgage broker coordinates things for you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. A mortgage broker can look at your numbers to find out which lender is the right fit for your loan needs. Your broker will present your mortgage loan application to several lenders, and works with the lender of choice until the loan closes. The borrower submits a commission to the broker when the loan closes.
Lending Institutions (banks, finance companies, and others) employ loan officers to offer, and process mortgage loans originated by that particular institution alone. They may be able to offer loans to fit many different situations, but all the loans are programs of the same lender.
A mortgage banker (also called an "account executive" or "loan representative") acts on behalf of the borrower to the lender. From selecting a loan to closing, a mortgage banker will walk a borrower through the process. Lending institutions give their mortgage bankers a commission or salary.
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