Mortgage Broker and Loan Officer

When it's time to find a mortgage , you should know the difference between a loan officer and a mortgage broker. Because both a mortgage broker and mortgage banker will help you buy a new home, it's easy to confuse them. But for the application process, it can benefit you if you recognize how they differ.

What is a Mortgage Broker?

A mortgage broker (either a company or an individual) is an independent agent for the mortgage loan borrower as well as the lender. Your mortgage broker will stand as coordinator between you and the lending institution; which can be a bank, trust company, credit union, mortgage corporation, finance company or even an individual, private investor. You work with a mortgage broker to consider your financial situation and lead you to 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. The broker gets a commission from the borrower when the loan closes.

Mortgage Bankers

The biggest difference between a mortgage broker and a mortgage banker is that the latter is employed by a lending institution (a bank, credit union, or others) to offer and process loans only from the programs of that institution. Although a mortgage banker may offer quite a range of loan programs, they will be programs with that lender alone.

Your mortgage banker represents you to the bank or other lending institution. The borrower is walked through the whole process, from finding a loan to closing, by the loan officer. Mortgage bankers are compensated with a commission or salary for their work by their employers.

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