Know what to expect: Mortgage Brokers vs. Loan Officers

When you apply for a mortgage loan, you need to know the difference between a mortgage broker and a mortgage banker. Since both a mortgage broker and lending officer will help you fund a new home, people sometimes confuse them. But for the application process, it can help if you understand their differences.

About Mortgage Brokers

A mortgage broker is someone or company that is an independent agent for both the mortgage loan borrower and the lender. Your mortgage broker will stand as coordinator between you and the lending institution; which can be a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. Which lender has the loans that is right for you? A mortgage broker will guide you to the best one. You give your mortgage loan application to your broker, who offers it to one or more lenders. Your mortgage broker then assists your work with the lender of choice until the closing of the loan. The broker is given a commission from the borrower upon closing.

About Loan Officers

The biggest difference between a mortgage broker and a mortgage banker is that a loan officer is employed by a lending institution (a bank, credit union, or others) to process loans solely from that institution. There can be an assortment of loans types to draw from although all are programs of that particular lending institution.

A loan officer (also called an "account executive" or "loan representative") represents the borrower to the lender. A mortgage banker can help the borrower through the application, processing and loan closing. Mortgage bankers may be paid a commission or salary for their work by their employers.

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