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. Since both give the same outcome (a new home), people can confuse the two. Yet it is valuable to understand how they differ so you have clear expectations of them during your mortgage process.

What is a Mortgage Broker?

During the mortgage loan process, an individual or group who is an independent agent for both mortgage loan applicant and lender is a mortgage broker. A mortgage broker facilitates things between 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 a private investor. A mortgage broker will examine your finances to determine which lender is the best fit for you. You deliver your loan application to your broker, who presents it to several lenders. Your mortgage broker then guides your work with the lender chosen until closing. The borrower gives a commission to the broker when the loan closes.

Mortgage Bankers

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to offer, and process mortgage loans solely from that particular institution. They may be able to offer loans to fit a variety of situations, but all the loans are products from the same lender.

Your mortgage banker represents you to the bank or other lending institution. The borrower is walked through the whole process, from loan selection to closing, by the mortgage banker. Loan officers will be paid a commission or salary for their work by their employers.

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