Mortgage Broker or Mortgage Banker
When it comes to locating a mortgage loan, you need to know the difference between a mortgage broker and a mortgage banker. As both a mortgage broker and mortgage banker will help you buy your new home, it's understandable to confuse the two. Yet it is useful to know how they differ so you know what to expect from them during the mortgage application process.
What is a Mortgage Broker?
During the mortgage loan process, an individual or group 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 bank, trust company, credit union, mortgage corporation, finance company or even a private investor. You partner with a mortgage broker to consider your financial situation and find the lender who has the right mortgage loan for you. From application to closing, your mortgage broker facilitates the loan process: submitting your mortgage application to a number of lenders, and walking you with the chosen lender through to the closing of the loan. The broker is given a commission from the borrower when the loan closes.
What is a Loan Officer?
Mortgage Bankers are representatives of a specific lending institution (such as a bank, credit union, etc.) who market and process mortgages and other loans from their place of employment alone. There can be an assortment of loans types to choose from even though all are products of that specific lending institution.
A mortgage banker (also known as an "account executive" or "loan representative") acts on behalf of the borrower to the lending institution. The borrower is walked through the whole process, from selecting a loan to closing, by the mortgage banker. Either a salary or commission is given to mortgage brokers by their employers.
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