Know the difference: Mortgage Brokers vs. Mortgage Bankers
Either a mortgage broker or a loan officer can help you when you apply for a mortgage loan. As both a mortgage broker and lending officer will help you buy your new home, it's common to confuse them. However, understanding the ways they differ is advantageous to the mortgage loan process.
What is a Mortgage Broker?
A mortgage broker (either a group or an individual) is an independent agent for both the mortgage loan applicant and the lender. A mortgage broker coordinates things between you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company or even an individual, 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 a private investor. Which lender offers the mortgage loans that fits your needs? A mortgage broker will help you find the right fit. From application to closing, your mortgage broker facilitates the loan process: presenting your application to several lenders, and walking you with the chosen lender through to closing. The broker is given a commission from the borrower upon closing.
About Loan Officers
Lending Institutions (banks, finance companies, and others) employ loan officers to offer, and process loans solely on behalf of that specific institution. While a mortgage banker may offer quite a variety of loan programs, they will be programs of that specific lender.
A mortgage banker will represent you to the bank or other lending institution. The borrower is guided through the whole process, from loan selection to closing, by the loan officer. Loan officers are compensated with a commission or salary for their services by their employers.
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