Mortgage Broker vs. Loan Officer

When you work on your application for a mortgage , you may work with a mortgage banker or you may choose to work with a mortgage broker. Because both give the same outcome (a new home), it's easy to confuse them. But as you begin your application process, it can benefit you if you understand their differences.

About Mortgage Brokers

A mortgage broker is someone or firm that is an independent agent for both the mortgage loan applicant 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, private investor. Which lender has the loan programs that is right for you? A mortgage broker will guide you to the right one. You give your loan application to your broker, who submits it to one or more lenders. Your mortgage broker then assists your work with the lender of choice until closing. The borrower submits a commission to the broker at closing.

About Loan Officers

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to offer, and process loans from that particular institution alone. While a loan officer may promote quite a variety of loan programs, they will be programs with that particular lender.

A mortgage banker (also called an "account executive" or "loan representative") represents the borrower to the lending institution. From choosing a loan to closing, a mortgage banker will guide a borrower through the process. Either a salary or commission is given to mortgage brokers by their employers.

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