Know what to expect: Mortgage Brokers vs. Mortgage Bankers

Either a mortgage broker or a loan officer may help you when it comes to getting a mortgage . Since both a mortgage broker and mortgage banker can help you buy a new home, it's common to confuse them. Yet understanding how they are different will be advantageous to the mortgage loan process.

What is a Mortgage Broker?

During the mortgage loan process, an individual or company who is an independent agent for the mortgage loan borrower as well as the lender is a mortgage broker. A mortgage broker facilitates 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 an individual, 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. A mortgage broker will consider your financial situation to find out which lender is the best fit for you. From application to closing, your mortgage broker facilitates your loan process: presenting your application to a number of lenders, and walking you with the chosen lender through to closing. The broker receives a commission from the borrower if the loan closes.

Mortgage Bankers

The main difference between a mortgage broker and a loan officer is that the latter works on behalf of a lending institution (a bank, credit union, or others) to market and process loans only from that institution. They may have the ability to promote loans to fit many different situations, but all the loans will be products of the same lender.

A mortgage banker (also known as an "account executive" or "loan representative") represents the borrower to the lending institution. A mortgage banker will guide the borrower through the application, processing and closing of the loan. Lenders compensate their loan officers with a salary or commission.

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