Know the difference: Mortgage Brokers vs. Mortgage Bankers

When it's time to find a mortgage loan, you need to know the difference between a mortgage broker and a mortgage banker. Because a new home is the result of the work of both mortgage broker and loan officer, it's common to confuse the two. But as you enter your application process, it will help if you recognize their differences.

About Mortgage Brokers

A mortgage broker is someone or company that is an independent agent for both the mortgage loan applicant and the lender. 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 a private investor. Which lender has the mortgage loans that fits your needs? A mortgage broker will help you find the best fit. Your broker will offer your mortgage application to one or more lenders, and works with the chosen lender until closing. The broker gets a commission from the borrower if the loan closes.

Loan Officers

Lending Institutions (banks, finance companies, and others) employ loan officers to offer, and process mortgage loans originated by that specific institution alone. They may have the ability to market loans to fit a variety of situations, but all the loans are programs from the same lender.

Your loan officer represents you to the bank or other lending institution. The loan officer can walk the borrower through the application, processing and loan closing. Lenders compensate the loan officers with a salary or commission.

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