Mortgage Broker vs. Mortgage Banker

When you apply for a mortgage , you may work with a mortgage banker or you may choose to work with a mortgage broker. As a new home is the result of the work of both mortgage broker and loan officer, people sometimes confuse the two. But for the application process, it can help if you understand their differences.

About Mortgage Brokers

A mortgage broker is a person or company that is an independent agent for the mortgage loan applicant as well as the lender. A mortgage broker coordinates things between 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 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 examine your financial situation to find out which lender is the right fit for you. From application to closing, your mortgage broker works with you: offering your loan application to several lenders, and walking you with the chosen lender through to the closing of your loan. If the loan closes, the broker's commission is given by the borrower.

What is a Loan Officer?

Loan officers work for a specific lending institution (such as a bank, credit union, etc.) who work with mortgages and other loan programs from their company alone. They may have the ability to market loans to fit many different situations, but all the loans are programs of the same lender.

Your loan officer represents you to the bank or other lending institution. A loan officer will guide the borrower through the application, processing and closing of the loan. Either a salary or commission is given to loan officers by their employers.

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