Know the difference: Mortgage Brokers and Mortgage Bankers
When you need a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. Because both a mortgage broker and mortgage banker will help you buy a new home, people often confuse them. However, knowing the ways they differ will be beneficial to your mortgage process.
During the mortgage loan process, an individual or group who is an independent agent for both mortgage loan borrower and lender is a mortgage broker. 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. Which lender offers the loans that is best for you? A mortgage broker will lead you to the right one. From application to closing, your mortgage broker works with you: offering your mortgage application to several lenders, and walking you with the chosen lender through to closing. Upon closing, the broker's commission is given by the borrower.
Loan officers represent a particular lending institution (such as a bank, credit union, etc.) who market and process mortgages and other lending programs from their company alone. While a loan officer may offer quite a variety of loan programs, they will be products with that lender alone.
A loan officer (also called an "account executive" or "loan representative") acts on behalf of the borrower to the lending institution. From finding a loan program to closing, a loan officer can walk a borrower through the process. Loan officers are compensated with a commission or salary for their services by their employers.
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