Know the difference: Mortgage Brokers vs. Mortgage Bankers
Either a mortgage broker or a mortgage banker may assist you when you apply for a mortgage loan. Because a new home is the result of the work of both mortgage broker and mortgage banker, it's understandable to confuse them. Yet recognizing the ways they differ is valuable to your mortgage process.
A mortgage broker is someone or firm that acts as an independent agent for both the mortgage loan applicant and the lender. A mortgage broker coordinates things for you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. A mortgage broker will consider your financial situation to find out which lender is the right fit for your loan needs. You give your loan application to your broker, who submits it to several lenders. Your mortgage broker then assists your work with the lender chosen until closing. Upon closing, the broker's commission comes from the borrower.
What is a Mortgage Banker?
Lending Institutions (banks, finance companies, and others) employ mortgage bankers to offer, and process mortgage loans solely from that specific institution. They may be able to offer loans to fit a variety of situations, but all the loans are programs from the same lender.
Your mortgage banker will represent you to the bank or other lending institution. A mortgage banker will guide the borrower through the selection, processing and loan closing. Either a salary or commission is given to loan officers by their employers.
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