Know the difference: Mortgage Brokers and Loan Officers
When you work on your application for a mortgage loan, you should know the difference between a loan officer and a mortgage broker. Since a new home is the result of the work of both mortgage broker and mortgage banker, people often confuse the two. But for your application process, it can benefit you if you know they ways they differ.
About Mortgage Brokers
A mortgage broker is an individual or firm that works as an independent agent for the mortgage loan borrower as well as the lender. Your mortgage broker will stand as coordinator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. You use a mortgage broker to analyze your financial situation and lead you to the lender who has the right loan program for you. Your broker will offer your mortgage application to various lenders, and works with the chosen lender until closing. At closing, the broker's commission is paid by the borrower.
The main difference between a mortgage broker and a loan officer is that the latter is employed by a lending institution (a bank, credit union, or others) to process loans solely from that institution. Although a loan officer may market quite a range of loan programs, they all are programs of that particular lender.
Also known as a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lender. From finding a loan program to closing, a loan officer can walk a borrower through the process. Either a salary or commission is given to mortgage brokers by their employers.
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