Mortgage Broker vs. Loan Officer

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When you need a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. Because both yield the same outcome (a new home), it's understandable to confuse the two. Yet it is valuable to recognize how they differ so you know what to expect from them as you enter the mortgage process.

What is a Mortgage Broker?

A mortgage broker (either a company or an individual) is an independent agent for the mortgage loan borrower as well as the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. A mortgage broker can look at your financial situation to find out which lender is the right fit for your loan needs. Your broker will submit your mortgage loan application to several lenders, and works with the chosen lender until the loan closes. The borrower gives a commission to the broker at closing.

About Loan Officers

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to promote, and process mortgage loans originated by that specific institution alone. They may be able to promote loans to fit a variety of situations, but all the loans will be products of the same lender.

A mortgage banker represents you to the bank or other lending institution. The loan officer will walk the borrower through the application, processing and closing of the loan. Mortgage bankers can be compensated with a commission or salary for their services by their employers.

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