Know the difference:
Mortgage Brokers and Mortgage Bankers

When you apply for a mortgage loan, you need to know the difference between a mortgage broker and a mortgage banker. Since both yield the same outcome (a new home), it’s common to confuse the two. However, it is helpful to recognize how they differ so you have clear expectations of them as you enter the mortgage process.

Mortgage Brokers

During the mortgage loan process, an individual or company who is an independent agent for the mortgage loan borrower as well as the lender is a mortgage broker. Your mortgage broker will stand as facilitator between you and the lending institution; which can be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. You use a mortgage broker to consider your financial situation and find the lender who has the right loan for you. From application to closing, your mortgage broker works with you: offering your application to several lenders, and walking you with the chosen lender through to the closing of your loan. Upon closing, the broker’s commission is paid by the borrower.

What is a Loan Officer?

Loan officers are representatives of a specific lending institution (such as a bank, credit union, etc.) who process mortgages and other lending programs for their place of employment alone. While a loan officer may offer quite a variety of loan programs, they are all programs from that particular lender.

A mortgage banker (also known as an “account executive” or “loan representative”) represents the borrower to the lending institution. The borrower is guided through the entire process, from loan selection to closing, by the loan officer. Either a salary or commission is given to loan officers by their employers.

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