Know the difference: Mortgage Brokers vs. Mortgage Bankers
When you need a mortgage , you need to know the difference between a loan officer and a mortgage broker. As a new home is the outcome of the work of both mortgage broker and mortgage banker, it's understandable to confuse the two job types. However, understanding the ways they differ is advantageous to the mortgage loan process.
About Mortgage Brokers
A mortgage broker (either a firm or an individual) is an independent agent for both the mortgage loan borrower and the lender. A mortgage broker coordinates things for you and your lender, which can be one of the following: a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. You work with a mortgage broker to review your financial situation and find the lender who has the right loan program for you. Your broker will offer your loan application to various lenders, and works with the chosen lender until the loan closes. If the loan closes, the broker's commission comes from the borrower.
About Mortgage Bankers
Lending Institutions (banks, finance companies, and others) employ mortgage bankers to market, and process mortgage loans originated by that particular institution alone. There may be a wide variety of loans types to choose from even though all are programs of that specific lender.
Your mortgage banker will represent you to the bank or other lending institution. A loan officer will help you through the selection, processing and loan closing. Lenders pay their loan officers a commission or salary.
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