Know the difference: Mortgage Brokers vs. Mortgage Bankers
When it's time to apply for a mortgage , you may work with a loan officer or you may choose to work with a mortgage broker. People usually confuse the two job types since both will reap the same outcome: a new home. But for your application process, it can help if you understand their differences.
About Mortgage Brokers
During the mortgage loan process, an individual or company who is an independent agent for the mortgage loan borrower as well as the lender is a mortgage broker. A mortgage broker facilitates things for you and your lender, which can be one of the following: a credit union, bank, trust company, finance company, mortgage corporation or even a private 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 an individual investor. Which lender offers the mortgage loans that is right for you? A mortgage broker will guide you to the best fit. You give your mortgage loan application to your broker, who offers it to various lenders. Your mortgage broker then helps you work with the lender of choice until the closing of the loan. At closing, the broker's commission is given by the borrower.
What is a Loan Officer?
Mortgage Bankers work for a specific lending institution (such as a bank) who market and process mortgages and other loans for their employer alone. There can be a variety of loans types to draw from although all are products of that specific lending institution.
Also called a "loan representative" or "account executive," a loan officer represents the borrower to the lender. The borrower is helped through the entire process, from selecting the loan to closing, by the loan officer. Either a salary or commission is paid to mortgage brokers by their employers.