Know the difference: Mortgage Brokers and Mortgage Bankers

When you need a mortgage , you should know the difference between a mortgage broker and a loan officer. Since both yield the same result (a new home), people can confuse them. But for the application process, it will benefit you if you understand their differences.

What is a Mortgage Broker?

A mortgage broker is someone or company that serves as an independent agent for the mortgage loan borrower as well as the lender. A mortgage broker facilitates 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 bank, trust company, credit union, mortgage corporation, finance company or even a private investor. Which lender offers the loans that fits your needs? A mortgage broker will help you find the right one. Your broker will present your loan application to one or more lenders, and works with the lender of choice until closing. At closing, the broker's commission comes from the borrower.

About Mortgage Bankers

Mortgage Bankers represent a specific lending institution (such as a bank) who process mortgages and other loan programs from their place of employment alone. They may be able to offer loans to fit many different situations, but all the loans are products from the same lender.

Also called a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lender. A mortgage banker will guide you through the selection, processing and loan closing. Mortgage bankers can be compensated with a commission or salary for their services by their employers.

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