Know what to expect: Mortgage Brokers and Loan Officers

When it's time to locate a mortgage , you need to know the difference between a loan officer and a mortgage broker. Since a new home is the result of the work of both mortgage broker and mortgage banker, people usually confuse the two job types. But as you enter your application process, it can help if you recognize their differences.

About Mortgage Brokers

A mortgage broker (either a firm or an individual) is an independent agent for both the mortgage loan applicant and the lender. A mortgage broker coordinates 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 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. A mortgage broker will examine your financial situation to determine which lender is the right fit for you. Your broker will submit your mortgage loan application to one or more lenders, and works with the lender of choice until closing. The borrower submits a commission to the broker at closing.

What is a Loan Officer?

Lending Institutions (banks, finance companies, and others) employ loan officers to market, and process mortgage loans solely from that specific institution. They may have the ability to market loans to fit many different situations, but all the loans will be programs from the same lender.

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

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