Mortgage Broker vs. Mortgage Banker
Either a mortgage broker or a mortgage banker can help you when it comes to applying for a mortgage loan. Since a new home is the outcome of the work of both mortgage broker and loan officer, it's understandable to confuse the two. However, it will be valuable to recognize the difference between them so you know what to expect from them as you enter the mortgage process.
What is a Mortgage Broker?
During the mortgage loan process, an individual or company who is an independent agent for both mortgage loan borrower and lender is a mortgage broker. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. Which lender has the loans that fits your needs? A mortgage broker will help you find the best one. Your broker will offer your loan application to various lenders, and works with the chosen lender until the loan closes. The borrower submits a commission to the broker when the loan closes.
Mortgage Bankers represent a particular lending institution (such as a bank, credit union, etc.) who process mortgages and other loan products on behalf of their company alone. Although a mortgage banker may market quite a variety of loan programs, they will be programs with that lender alone.
A mortgage banker will represent you to the bank or other lending institution. The mortgage banker can guide you through the selection, processing and closing of the loan. Lenders compensate their loan officers with a salary or commission.
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