Mortgage Broker vs. Loan Officer

When you work on your application for a mortgage loan, you need to know the difference between a mortgage broker and a mortgage banker. Since both produce the same outcome (a new home), it's easy to confuse them. But for the application process, it will benefit you if you know their differences.

About Mortgage Brokers

During the mortgage loan process, an individual or firm who is an independent agent for both mortgage loan applicant and lender is a mortgage broker. A mortgage broker facilitates things for you and your lender, which can be one of the following: a credit union, bank, trust company, finance company, mortgage corporation or even an individual 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. You work with a mortgage broker to review your financial situation and find the lender who has the right mortgage loan for you. From application to closing, your mortgage broker works with you: presenting your application to several lenders, and walking you with the chosen lender through to closing. The borrower submits a commission to the broker when the loan closes.

Mortgage Bankers

Mortgage Bankers represent a particular lending institution (such as a bank) who work with mortgages and other loan products from their company alone. While a mortgage banker may offer quite a range of loan programs, they will be products with that lender alone.

Your mortgage banker will represent you to the bank or other lending institution. A loan officer will walk the borrower through the selection, processing and loan closing. Either a salary or commission is paid to loan officers by their employers.

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