Know the difference: Mortgage Brokers and Mortgage Bankers
When it comes to getting a mortgage , you may work with a mortgage banker or you may choose to work with a mortgage broker. As a new home is the outcome of the work of both mortgage broker and loan officer, it's understandable to confuse the two. Yet recognizing the ways they differ is beneficial to the mortgage process.
During the mortgage loan process, an individual or firm who is an independent agent for both mortgage loan applicant and lender is a mortgage broker. Your mortgage broker will stand as coordinator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. A mortgage broker will consider your finances to determine which lender is the right fit for you. Your broker will offer your loan application to various lenders, and works with the chosen lender until closing. The borrower gives a commission to the broker upon closing.
What is a Loan Officer?
Loan officers work for a specific lending institution (such as a bank, credit union, etc.) who promote and process mortgages and other loan products from their employer alone. While a mortgage banker may offer quite a variety of loan programs, they are all programs of that specific lender.
Also called a "loan representative" or "account executive," a mortgage banker represents the borrower to the lending institution. The borrower is walked through the whole process, from choosing a loan to closing, by the mortgage banker. Lending institutions compensate their mortgage bankers with a salary or commission.
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