Mortgage Broker vs. Mortgage Banker

When you're looking to get a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. People often confuse these as both will produce the same result: a new home. But for the application process, it will benefit you if you understand how they differ.

About Mortgage Brokers

A mortgage broker is someone or group that works as an independent agent for the mortgage loan borrower as well as the lender. A mortgage broker facilitates 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 loans that fits your needs? A mortgage broker will lead you to the best one. From application to closing, your mortgage broker works with you: submitting your loan application to several lenders, and walking you with the chosen lender through to closing. When the loan closes, the broker's commission is paid by the borrower.

About Mortgage Bankers

The most important difference between a mortgage broker and a mortgage banker is that the latter works on behalf of a lending institution (a bank, credit union, or others) to process loans solely originated from the products of that institution. They may have the ability to offer loans to fit many different situations, but all the loans are programs of the same lender.

Also known as a "loan representative" or "account executive," a loan officer represents the borrower to the lender. From finding a loan product to closing, a mortgage banker will walk you through the process. Either a salary or commission is paid to loan officers by their employers.

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