Mortgage Broker vs. Mortgage Banker
Either a mortgage broker or a loan officer may work with you when you need a mortgage . Because a new home is the result of the work of both mortgage broker and mortgage banker, people usually confuse the two. Yet it is beneficial to understand the difference between the two jobs so you know what to expect from them as you enter the mortgage application process.
About Mortgage Brokers
A mortgage broker (either a group or an individual) is an independent agent for both the mortgage loan borrower and the lender. A mortgage broker coordinates 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 bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. You work with a mortgage broker to examine your financial situation and lead you to the lender who has the right loan program for you. You deliver your loan application to your broker, who presents it to various lenders. Your mortgage broker then guides your work with the lender chosen until the closing of the loan. Upon closing, the broker's commission is given by the borrower.
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 solely from that institution. They may have the ability to offer loans to fit many different situations, but all the loans are products from the same lender.
A mortgage banker (also called an "account executive" or "loan representative") acts on behalf of the borrower to the lender. A mortgage banker will walk you through the application, processing and closing of the loan. Either a salary or commission is paid to loan officers by their employers.
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