Mortgage Broker or Mortgage Banker

Either a mortgage broker or a loan officer may help you when you're looking to get a mortgage loan. Since both give the same result (a new home), it's common to confuse the two. But as you begin your application process, it can benefit you if you recognize how they differ.

Mortgage Brokers

A mortgage broker (either a company or an individual) is an independent agent for the mortgage loan applicant as well as 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 an individual investor. Which lender offers the mortgage loans that fits your needs? A mortgage broker will help you find the right one. Your broker will offer your mortgage loan application to a handful of lenders, and works with the lender of choice until closing. Upon closing, the broker's commission is paid by the borrower.

What is a Loan Officer?

The biggest difference between a mortgage broker and a mortgage banker is that the latter works for a lending institution (a bank, credit union, or others) to process loans solely originated from that institution. Although a mortgage banker may promote quite a range of loan programs, they are all products of that lender alone.

A mortgage banker (also known as an "account executive" or "loan representative") acts on behalf of the borrower to the lender. The mortgage banker can walk the borrower through the application, processing and loan closing. Either a salary or commission is given to loan officers by their employers.

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