Know the difference: Mortgage Brokers vs. Mortgage Bankers
Either a mortgage broker or a loan officer can assist you when you work on your application for a mortgage loan. It's common to confuse the two job types since both will yield the same result: a new home. But as you begin the application process, it will help if you understand they ways they differ.
About Mortgage Brokers
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 can be a bank, trust company, credit union, mortgage corporation, finance company or even an individual, private investor. You use a mortgage broker to review your financial circumstance and find the lender who has the right mortgage loan for you. From application to closing, your mortgage broker facilitates the loan process: presenting your loan application to several lenders, and coordinating the process with the lender through to the closing of your loan. The borrower pays a commission to the broker upon closing.
Lending Institutions (banks, finance companies, and others) employ mortgage bankers to market, and process mortgage loans on behalf of that particular institution alone. They may be able to market loans to fit many different situations, but all the loans are programs of the same lender.
A loan officer (also known as an "account executive" or "loan representative") represents the borrower to the lending institution. The borrower is guided through the entire process, from finding the loan to closing, by the loan officer. Either a salary or commission is paid to mortgage brokers by their employers.
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