Know what to expect: Mortgage Brokers and Loan Officers

When you work on your application for a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. Because both reap the same result (a new home), people often confuse the two job types. But as you begin the application process, it will benefit you if you recognize how they are different.

About Mortgage Brokers

During the mortgage loan process, an individual or firm who is an independent agent for both mortgage loan borrower and lender is a mortgage broker. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. A mortgage broker will look at your finances to determine which lender is the right fit for you. From application to closing, your mortgage broker works with you: offering your application to several lenders, and coordinating the process with the lender through to closing. Upon closing, the broker's commission comes from the borrower.

About Loan Officers

The most important difference between a mortgage broker and a loan officer is that the latter works on behalf of a lending institution (a bank, credit union, or others) to process loans only from the programs of that institution. There may be an assortment of loans types to choose from, but all are programs of that particular lender.

Also known as a "loan representative" or "account executive," a mortgage banker represents the borrower to the lending institution. From choosing a loan program to closing, a loan officer will help the borrower through the process. Either a salary or commission is paid to loan officers by their employers.

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