Know what to expect: Mortgage Brokers and Loan Officers
When it's time to get a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. Because a new home is the result of the work of both mortgage broker and loan officer, it's easy to confuse the two. But as you begin your application process, it can help if you understand they ways they differ.
During the mortgage loan process, an individual or group 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 credit union, bank, trust company, finance company, mortgage corporation or even a private investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. Which lender has the loans that fits your needs? A mortgage broker will lead you to the right fit. Your broker will submit your mortgage loan application to several lenders, and works with the lender of choice until closing. Upon closing, the broker's commission comes from the borrower.
What is a Mortgage Banker?
The main difference between a mortgage broker and a loan officer is that the latter works for a lending institution (a bank, credit union, or others) to process loans only originated from that institution. While a mortgage banker may market quite a range of loans, they all are programs from that lender alone.
Also called a "loan representative" or "account executive," a mortgage banker represents the borrower to the lending institution. From finding a loan product to closing, a loan officer will help you through the process. Lenders compensate their mortgage bankers with a commission or salary.
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