Know the difference: Mortgage Brokers vs. Mortgage Bankers
When it's time to find a mortgage , you should know the difference between a mortgage broker and a loan officer. As both give the same outcome (a new home), it's common to confuse the two job types. Yet it will be valuable to understand how they differ so you know what to expect from them during the mortgage process.
A mortgage broker (either a company or an individual) 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 can be a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. You partner with a mortgage broker to look at your financial circumstance and find the lender who has the right mortgage loan for you. You give your mortgage application to your broker, who presents it to one or more lenders. Your mortgage broker then guides your work with the lender chosen until the closing of the loan. At closing, the broker's commission is paid by the borrower.
About Mortgage Bankers
Lending Institutions (banks, finance companies, and others) employ mortgage bankers to market, and process mortgage loans solely originated by that specific institution. They may be able to promote loans to fit a variety of situations, but all the loans will be programs of the same lender.
A mortgage banker represents you to the bank or other lending institution. From choosing a loan to closing, a loan officer will walk a borrower through the process. Loan officers may be given a commission or salary for their work by their employers.
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