Know the difference: Mortgage Brokers and Loan Officers
When you're looking to get a mortgage , you need to know the difference between a mortgage broker and a mortgage banker. It's understandable to confuse these since both will reap the same outcome: a new home. But as you begin your application process, it can benefit you if you know they ways they differ.
What is a Mortgage Broker?
A mortgage broker (either a firm 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 a private investor. You use a mortgage broker to look at your financial circumstance and lead you to the lender who has the right loan program for you. From application to closing, your mortgage broker facilitates the loan process: offering your loan application to a number of lenders, and coordinating the process with the lender through to closing. Upon closing, the broker's commission is given by the borrower.
The main difference between a mortgage broker and a mortgage banker is that the latter works on behalf of a lending institution (a bank, credit union, or others) to promote and process loans solely from that institution. There may be an assortment of loans types to draw from although all are products of that particular lending institution.
Also called a "loan representative" or "account executive," a loan officer represents the borrower to the lending institution. The borrower is helped through the whole process, from loan selection to closing, by the loan officer. Either a salary or commission is given to mortgage brokers by their employers.
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