Know the difference: Mortgage Brokers vs. Mortgage Bankers
When it's time to apply for a mortgage loan, you should know the difference between a mortgage broker and a loan officer. As both reap the same outcome (a new home), people often confuse them. However, recognizing the ways they differ is helpful to the mortgage loan process.
About Mortgage Brokers
A mortgage broker (either a group 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 can be a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. Which lender offers the loans that is best for you? A mortgage broker will guide you to the right fit. Your broker will present your mortgage application to a handful of lenders, and works with the chosen lender until the loan closes. The broker receives a commission from the borrower upon closing.
About Mortgage Bankers
Lending Institutions (banks, finance companies, and others) employ loan officers to market, and process mortgage loans solely from that particular institution. There may be a wide range of loans types to choose from even though all are products of that specific lender.
A loan officer (also known as an "account executive" or "loan representative") represents the borrower to the lending institution. From finding a loan product to closing, a mortgage banker will help you through the process. Mortgage bankers will be compensated with a commission or salary for their work by their employers.
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