Know the difference: Mortgage Brokers and Mortgage Bankers
When you need a mortgage , you should know the difference between a loan officer and a mortgage broker. It's easy to confuse these as both will produce the same result: a new home. Yet recognizing the differences between them will be helpful to the mortgage loan process.
A mortgage broker (either a group or an individual) 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 may be a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. Which lender has the loans that fits your financial situation? A mortgage broker will help you find the right one. Your broker will present your mortgage application to several lenders, and works with the lender of choice until closing. When the loan closes, the broker's commission is given by the borrower.
What is a Mortgage Banker?
Mortgage Bankers represent a particular lending institution (such as a bank) who work with mortgages and other lending programs originated by their company alone. They may have the ability to promote loans to fit many different situations, but all the loans will be programs from the same lender.
Also called a "loan representative" or "account executive," a loan officer represents the borrower to the lender. The loan officer can walk you through the application, processing and closing of the loan. Either a salary or commission is paid to loan officers by their employers.
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