Know the difference: Mortgage Brokers vs. Loan Officers
Either a mortgage broker or a mortgage banker can work with you when you work on your application for a mortgage loan. Because both a mortgage broker and lending officer can help you buy your new home, it's easy to confuse them. But for the application process, it will benefit you if you understand how they differ.
A mortgage broker is a person or firm that 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 an individual, private investor. Which lender has the loans that is best for you? A mortgage broker will guide you to the best fit. From application to closing, your mortgage broker works with you: offering your application to a number of lenders, and walking you with the chosen lender through to closing. The borrower pays a commission to the broker upon closing.
What is a Mortgage Banker?
Lending Institutions (banks, finance companies, and others) employ mortgage bankers to promote, and process mortgage loans solely originated by that particular institution. While a loan officer may promote quite a range of loans, they will be programs of that lender alone.
A loan officer (also known as an "account executive" or "loan representative") represents the borrower to the lending institution. A mortgage banker will help you through the selection, processing and loan closing. Either a salary or commission is given to loan officers by their employers.
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