Know what to expect: Mortgage Brokers and Loan Officers

When you're looking to get a mortgage , you should know the difference between a loan officer and a mortgage broker. As a new home is the result of the work of both mortgage broker and mortgage banker, it's easy to confuse the two job types. But as you enter your application process, it will help if you recognize how they are different.

What is a Mortgage Broker?

During the mortgage loan process, an individual or company who is an independent agent for the mortgage loan applicant as well as the lender is a mortgage broker. Your mortgage broker will stand as facilitator between you and the lending institution; which can be a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. You partner with a mortgage broker to review your financial circumstance and find the lender who has the best mortgage loan for you. You deliver your application to your broker, who offers it to several lenders. Your mortgage broker then guides your work with the lender of choice until the closing of the loan. The borrower pays a commission to the broker when the loan closes.

What is a Mortgage Banker?

The most important difference between a mortgage broker and a mortgage banker is that the latter is employed by a lending institution (a bank, credit union, or others) to offer and process loans only originated from the products of that institution. They may have the ability to market loans to fit many different situations, but all the loans will be programs from the same lender.

A mortgage banker represents you to the bank or other lending institution. From finding a loan product to closing, a loan officer will help you through the process. Either a salary or commission is paid to mortgage brokers by their employers.

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