Know the difference: Mortgage Brokers and Loan Officers

When you work on your application for a mortgage , you may work with a loan officer or you may choose to work with a mortgage broker. Since both a mortgage broker and mortgage banker can help you buy your new home, people sometimes confuse the two. However, it will be important to recognize the ways they differ so you have clear expectations of them as you enter your mortgage process.

About Mortgage Brokers

During the mortgage loan process, an individual or company who is an independent agent for the mortgage loan borrower as well as the lender is a mortgage broker. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. Which lender has the loan programs that fits your needs? A mortgage broker will help you find the right one. You deliver your loan application to your broker, who presents it to various lenders. Your mortgage broker then helps you work with the lender of choice until the closing of the loan. When the loan closes, the broker's commission is given by the borrower.

Mortgage Bankers

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to promote, and process loans solely from that particular institution. There can be a wide range of loans types to draw from, but all are products of that specific lending institution.

A loan officer represents you to the bank or other lending institution. The mortgage banker can help you through the selection, processing and closing of the loan. Lending institutions compensate their mortgage bankers with a commission or salary.

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