Mortgage Broker and Mortgage Banker

When you work on your application for a mortgage loan, you need to know the difference between a mortgage banker and a mortgage broker. Since a new home is the result of the work of both mortgage broker and loan officer, it's common to confuse the two. However, knowing the ways they differ will be important to the mortgage process.

What is a Mortgage Broker?

A mortgage broker (either a company or an individual) is an independent agent for the mortgage loan applicant as well as the lender. A mortgage broker coordinates things for you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company 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 use a mortgage broker to review your financial circumstance and lead you to the lender who has the best loan program for you. From application to closing, your mortgage broker facilitates your loan process: offering your loan application to several lenders, and walking you with the chosen lender through to the closing of the loan. The broker is given a commission from the borrower upon closing.

Mortgage Bankers

Loan officers are representatives of a specific lending institution (such as a bank) who work with mortgages and other loan programs for their place of employment alone. They may be able to offer loans to fit a variety of situations, but all the loans are products of the same lender.

A mortgage banker will represent you to the bank or other lending institution. The borrower is guided through the entire process, from loan selection to closing, by the mortgage banker. Loan officers are paid a commission or salary for their services by their employers.

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