Know what to expect: Mortgage Brokers vs. Loan Officers

When you need a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. Since both a mortgage broker and mortgage banker will help you purchase a new home, people frequently confuse them. But as you enter the application process, it can help if you know they ways they differ.

Mortgage Brokers

During the mortgage loan process, an individual or company 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 can be a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. Which lender offers the mortgage loans that is best for you? A mortgage broker will lead you to the best fit. You give your loan application to your broker, who offers it to several lenders. Your mortgage broker then assists your work with the lender of choice until closing. The borrower submits a commission to the broker upon closing.

Mortgage Bankers

Mortgage Bankers are representatives of a specific lending institution (such as a bank, credit union, etc.) who work with mortgages and other lending programs on behalf of their place of employment alone. They may have the ability to offer loans to fit many different situations, but all the loans will be programs of the same lender.

A loan officer (also known as an "account executive" or "loan representative") represents the borrower to the lender. The borrower is helped through the entire process, from loan selection to closing, by the mortgage banker. Lenders give their loan officers a salary or commission.

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