Know what to expect: Mortgage Brokers vs. Mortgage Bankers
Either a mortgage broker or a mortgage banker may assist you when it's time to apply for a mortgage . It's common to confuse the two as both will yield the same outcome: a new home. However, understanding how they are different will be useful to the mortgage process.
What is a Mortgage Broker?
During the mortgage loan process, an individual or firm who is an independent agent for the mortgage loan applicant as well as the lender is a mortgage broker. A mortgage broker facilitates things between 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, 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. A mortgage broker will review your finances to find out which lender is the right fit for your loan needs. You deliver your mortgage application to your broker, who presents it to a number of lenders. Your mortgage broker then assists your work with the lender chosen until the closing of the loan. The broker gets a commission from the borrower if the loan closes.
The biggest difference between a mortgage broker and a mortgage banker is that a loan officer is employed by a lending institution (a bank, credit union, or others) to process loans solely from that institution. They may be able to promote loans to fit a variety of situations, but all the loans will be programs from the same lender.
A mortgage banker (also called an "account executive" or "loan representative") acts on behalf of the borrower to the lender. From choosing a loan to closing, a loan officer will guide a borrower through the process. Loan officers may be compensated with a commission or salary for their work by their employers.
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