Mortgage Broker vs. Loan Officer
When it's time to apply for a mortgage loan, you should know the difference between a mortgage broker and a mortgage banker. As both a mortgage broker and lending officer will help you buy a new home, it's easy to confuse them. But as you begin your application process, it can benefit you if you know their differences.
What is a Mortgage Broker?
A mortgage broker (either a group or an individual) 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 may be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. Which lender offers the loans that is right for you? A mortgage broker will lead you to the best fit. Your broker will offer your mortgage application to several lenders, and works with the lender of choice until closing. When the loan closes, the broker's commission comes from the borrower.
Loan officers represent a specific lending institution (such as a bank, credit union, etc.) who work with mortgages and other loan programs for their place of employment alone. There can be a wide variety of loans types to choose from, but all are programs of that particular lending institution.
A mortgage banker (also known as an "account executive" or "loan representative") acts on behalf of the borrower to the lending institution. From selecting a loan program to closing, a loan officer can help you through the process. Either a salary or commission is given to loan officers by their employers.
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