Know what to expect: Mortgage Brokers and Mortgage Bankers

Either a mortgage broker or a mortgage banker can help you when you apply for a mortgage . Because both give the same result (a new home), it's common to confuse the two. But for the application process, it can help if you understand their differences.

What is a Mortgage Broker?

A mortgage broker is someone or company that serves as an independent agent for both the mortgage loan borrower and the lender. 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 a private investor. Which lender has the loan programs that fits your needs? A mortgage broker will help you find the best one. You give your mortgage application to your broker, who submits it to one or more lenders. Your mortgage broker then assists your work with the lender chosen until the closing of the loan. The broker is given a commission from the borrower upon closing.

Loan Officers

The main difference between a mortgage broker and a loan officer is that the latter works on behalf of a lending institution (a bank, credit union, or others) to process loans only originated from that institution. They may be able to promote loans to fit a variety of situations, but all the loans will be programs from the same lender.

A mortgage banker (also called an "account executive" or "loan representative") acts on behalf of the borrower to the lending institution. From finding a loan program to closing, a loan officer will guide you through the process. Either a salary or commission is paid to mortgage brokers by their employers.

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