Mortgage Broker vs. Mortgage Banker

When you're looking to get a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. People can confuse the two because both will yield the same outcome: a new home. Yet it will be valuable to recognize the ways they differ so you have clear expectations of them during the mortgage application process.

Mortgage Brokers

A mortgage broker is an individual or company that is an independent agent for the mortgage loan borrower as well as the lender. A mortgage broker facilitates things for you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. Which lender offers the loan programs that is best for you? A mortgage broker will help you find the right one. You deliver your mortgage loan application to your broker, who offers it to a number of lenders. Your mortgage broker then assists your work with the lender of choice until closing. The broker is given a commission from the borrower upon closing.

What is a Mortgage Banker?

The most important difference between a mortgage broker and a mortgage banker is that the latter works for a lending institution (a bank, credit union, or others) to promote and process loans only originated from that institution. There may be a wide variety of loans types to choose from even though all are products of that particular lender.

Your mortgage banker will represent you to the bank or other lending institution. From finding a loan product to closing, a mortgage banker will guide a borrower through the process. Lenders pay their mortgage bankers a commission or salary.

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