Know what to expect: Mortgage Brokers vs. Mortgage Bankers

Either a mortgage broker or a loan officer may assist you when you work on your application for a mortgage loan. Because both a mortgage broker and lending officer will help you buy your new home, it's common to confuse the two. Yet it is valuable to recognize the ways they differ so you have clear expectations of them as you enter the mortgage application process.

Mortgage Brokers

During the mortgage loan process, an individual or company who is an independent agent for both mortgage loan applicant and lender is a mortgage broker. A mortgage broker coordinates things between 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, private 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 an individual investor. You work with a mortgage broker to examine your financial situation and find the lender who has the right loan program for you. You give your loan application to your broker, who submits it to various lenders. Your mortgage broker then assists your work with the lender chosen until closing. The borrower pays a commission to the broker if the loan closes.

Loan Officers

Lending Institutions (banks, finance companies, and others) employ loan officers to market, and process mortgage loans originated by that particular institution alone. Although a loan officer may market quite a range of loan programs, they are all programs with that specific lender.

Also called a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lending institution. From selecting a loan program to closing, a loan officer will walk a borrower through the process. Lenders give their loan officers a salary or commission.

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