Know what to expect: Mortgage Brokers vs. Mortgage Bankers
When you need a mortgage , you should know the difference between a loan officer and a mortgage broker. Because both a mortgage broker and lending officer will help you purchase a new home, people can confuse them. But for your application process, it can help if you recognize their differences.
What is a Mortgage Broker?
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 coordinator between you and the lending institution; which can be a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. A mortgage broker can consider your numbers to find out which lender is the best fit for your loan needs. From application to closing, your mortgage broker works with you: offering your loan application to a number of lenders, and coordinating the process with the lender through to closing. Upon closing, the broker's commission is paid by the borrower.
What is a Loan Officer?
The biggest difference between a mortgage broker and a loan officer is that a mortgage banker works for a lending institution (a bank, credit union, or others) to promote and process loans only originated from the products of that institution. There may be an assortment of loans types to choose from although all are programs of that particular lender.
Also called a "loan representative" or "account executive," a mortgage banker represents the borrower to the lender. The borrower is helped through the whole process, from loan selection to closing, by the mortgage banker. Mortgage bankers are given a commission or salary for their work by their employers.
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