Know the difference: Mortgage Brokers vs. Mortgage Bankers
When it's time to get a mortgage loan, you should know the difference between a mortgage banker and a mortgage broker. As a new home is the result of the work of both mortgage broker and loan officer, it's common to confuse them. But as you enter your application process, it can help if you recognize their differences.
A mortgage broker is an individual or group that is 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 can be a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. Which lender has the loans that fits your financial situation? A mortgage broker will lead you to the best one. Your broker will offer your mortgage loan application to several lenders, and works with the chosen lender until closing. Upon closing, the broker's commission comes from the borrower.
About Mortgage Bankers
Loan officers work for a particular lending institution (such as a bank, credit union, etc.) who process mortgages and other loan products from their place of employment alone. There may be a wide variety of loans types to choose from even though all are programs of that particular lender.
Also called a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lending institution. The loan officer can walk you through the application, processing and closing of the loan. Mortgage bankers are paid a commission or salary for their services by their employers.
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