Broker vs Loan Officer

Know the difference: Mortgage Brokers vs. Mortgage Bankers

When it comes to locating a mortgage loan, you may work with a loan officer or you may choose to work With a mortgage broker. It's easy to confuse the two job types since both will give the same result: a new home. Yet knowing the differences between them will be helpful to the mortgage loan process.

Mortgage Brokers

A mortgage broker (either a group or an individual) is an independent agent for the mortgage loan applicant as well as the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. Which lender offers the mortgage loans that fits your financial situation? A mortgage broker will help you find the best fit. You give your loan application to your broker, who offers it to several lenders. Your mortgage broker then guides your work with the lender chosen until the loan closes. At closing, the broker's commission is given by the borrower.

About Mortgage Bankers

The biggest difference between a mortgage broker and a loan officer is that a mortgage banker is employed by a lending institution (a bank, credit union, or others) to process loans solely originated from the products of that 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 will represent you to the bank or other lending institution. The borrower is walked through the entire process, from finding the loan to closing, by the loan officer. Lenders give their mortgage bankers a salary or commission.

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