Mortgage Broker and Loan Officer

When you work on your application for a mortgage loan, you need to know the difference between a mortgage broker and a mortgage banker. Because a new home is the outcome of the work of both mortgage broker and loan officer, it's understandable to confuse them. Yet recognizing how they differ will be advantageous to your mortgage loan process.

What is a Mortgage Broker?

A mortgage broker (either a group or an individual) is an independent agent for both the mortgage loan applicant and the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which can be a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. You use a mortgage broker to review your financial situation and lead you to the lender who has the right loan for you. You give your mortgage application to your broker, who submits it to several lenders. Your mortgage broker then assists your work with the lender of choice until closing. At closing, the broker's commission is paid by the borrower.

About Mortgage Bankers

Loan officers are representatives of a specific lending institution (such as a bank) who process mortgages and other loan programs from their company alone. Although a mortgage banker may offer quite a range of loans, they are all programs of that lender alone.

Your loan officer represents you to the bank or other lending institution. The borrower is walked through the entire process, from selecting the loan to closing, by the loan officer. Lending institutions compensate their mortgage bankers with a salary or commission.

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