Mortgage Broker or Mortgage Banker

When you work on your application for a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. As both a mortgage broker and lending officer will help you buy your new home, people often confuse them. Yet understanding the differences between them will be valuable to the mortgage process.

About Mortgage Brokers

During the mortgage loan process, an individual or group who is an independent agent for the mortgage loan borrower as well as the lender is a mortgage broker. Your mortgage broker will stand as coordinator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. You work with a mortgage broker to analyze your financial circumstance and find the lender who has the best loan program for you. Your broker will present your mortgage loan application to one or more lenders, and works with the lender of choice until the loan closes. At closing, the broker's commission is paid by the borrower.

What is a Loan Officer?

Lending Institutions (banks, finance companies, and others) employ loan officers to market, and process loans originated by that specific institution alone. They may have the ability to offer loans to fit many different situations, but all the loans will be products of the same lender.

Also known as a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lender. The loan officer will walk you through the application, processing and closing of the loan. Either a salary or commission is given to mortgage brokers by their employers.

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