Know the difference: Mortgage Brokers vs. Mortgage Bankers
When it comes to applying for a mortgage loan, you should know the difference between a loan officer and a mortgage broker. Because a new home is the result of the work of both mortgage broker and mortgage banker, it's easy to confuse them. Yet it will be valuable to understand the difference between them so you know what to expect from them as you enter the mortgage application process.
About Mortgage Brokers
A mortgage broker is someone or group that serves as an independent agent for both the mortgage loan borrower and the lender. A mortgage broker coordinates things between you and your lender, which can be one of the following: a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. A mortgage broker will look at your financial situation to find out which lender is the right fit for you. Your broker will present your loan application to various lenders, and works with the chosen lender until the loan closes. Upon closing, the broker's commission comes from the borrower.
About Mortgage Bankers
Mortgage Bankers are representatives of a specific lending institution (such as a bank, credit union, etc.) who offer and process mortgages and other loans on behalf of their place of employment alone. Although a loan officer may offer quite a range of loan programs, they all are programs from that one lender.
A mortgage banker (also known as an "account executive" or "loan representative") acts on behalf of the borrower to the lending institution. The loan officer will guide you through the application, processing and loan closing. Either a salary or commission is given to mortgage brokers by their employers.
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