Mortgage Broker or Loan Officer

When you need a mortgage loan, you need to know the difference between a mortgage banker and a mortgage broker. Since both produce the same result (a new home), people usually confuse them. However, it will be useful to understand how they differ so you have clear expectations of them during your mortgage application process.

Mortgage Brokers

A mortgage broker (either a firm or an individual) is an independent agent for both the mortgage loan borrower and the lender. A mortgage broker facilitates 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 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 a private investor. You partner with a mortgage broker to consider your financial situation and find the lender who has the right loan for you. You deliver your mortgage application to your broker, who presents it to various lenders. Your mortgage broker then guides your work with the lender of choice until the loan closes. The borrower submits a commission to the broker upon closing.

What is a Loan Officer?

Lending Institutions (banks, finance companies, and others) employ loan officers to promote, and process mortgage loans solely on behalf of that particular institution. There may be an assortment of loans types to draw from although all are programs of that specific lending institution.

A loan officer (also called an "account executive" or "loan representative") represents the borrower to the lender. From selecting a loan program to closing, a mortgage banker will guide a borrower through the process. Loan officers are compensated with a commission or salary for their services by their employers.

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