Know the difference: Mortgage Brokers and Mortgage Bankers
When you work on your application for a mortgage loan, you should know the difference between a loan officer and a mortgage broker. Because both a mortgage broker and mortgage banker will help you fund your new home, people can confuse the two. However, recognizing the differences between them will be valuable to your mortgage process.
About Mortgage Brokers
During the mortgage loan process, an individual or firm who is an independent agent for the mortgage loan applicant as well as the lender is a mortgage broker. Your mortgage broker will stand as coordinator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. A mortgage broker can review your finances to determine which lender is the best fit for your loan needs. From application to closing, your mortgage broker works with you: offering your loan application to a number of lenders, and coordinating the process with the lender through to closing. Upon closing, the broker's commission comes from the borrower.
About Loan Officers
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 process loans solely from the products of that institution. There may be a wide range of loans types to draw from, but all are products of that particular lender.
A mortgage banker (also called an "account executive" or "loan representative") acts on behalf of the borrower to the lender. From finding a loan program to closing, a loan officer will help a borrower through the process. Lending institutions give their mortgage bankers a salary or commission.
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