Know the difference: Mortgage Brokers and Mortgage Bankers
When it comes to locating a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. As both reap the same result (a new home), people often confuse the two job types. But as you begin the application process, it can benefit you if you know their differences.
What is a Mortgage Broker?
A mortgage broker (either a firm 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 can be a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. You work with a mortgage broker to examine your financial circumstance and find the lender who has the right loan program for you. From application to closing, your mortgage broker facilitates your loan process: presenting your loan application to several lenders, and coordinating the process with the lender through to closing. Upon closing, the broker's commission is paid by the borrower.
About Loan Officers
The most important difference between a mortgage broker and a loan officer is that the latter works for a lending institution (a bank, credit union, or others) to market and process loans solely from that institution. While a mortgage banker may market quite a variety of loan programs, they are all products with that specific lender.
Also known as a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lending institution. From selecting a loan program to closing, a loan officer will guide you through the process. Loan officers are given a commission or salary for their work by their employers.
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