Know what to expect: Mortgage Brokers and Mortgage Bankers
When you apply for a mortgage loan, you need to know the difference between a mortgage banker and a mortgage broker. As a new home is the outcome of the work of both mortgage broker and loan officer, people often confuse the two job types. But as you enter your application process, it can help if you know how they are different.
About Mortgage Brokers
A mortgage broker (either a company or an individual) is 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 credit union, bank, trust company, finance company, mortgage corporation or even an individual, private 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 an individual, private investor. You work with a mortgage broker to review your financial situation and lead you to the lender who has the right mortgage loan for you. Your broker will present your mortgage loan application to various lenders, and works with the lender of choice until the loan closes. If the loan closes, the broker's commission is paid by the borrower.
About Loan Officers
Lending Institutions (banks, finance companies, and others) employ mortgage bankers to market, and process mortgage loans from that specific institution alone. There may be a variety of loans types to choose from even though all are products of that particular lender.
A mortgage banker (also known as an "account executive" or "loan representative") represents the borrower to the lending institution. From finding a loan product to closing, a mortgage banker will help you through the process. Lending institutions compensate the mortgage bankers with a commission or salary.
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