Know the difference: Mortgage Brokers vs. Mortgage Bankers
When it's time to find a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. Since both a mortgage broker and mortgage banker can help you purchase your new home, people frequently confuse them. But as you begin the application process, it can help if you recognize they ways they differ.
What is a Mortgage Broker?
A mortgage broker is someone or group that acts as an independent agent for both the mortgage loan borrower and the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. You use a mortgage broker to look at your financial circumstance and lead you to the lender who has the best loan program for you. Your broker will present your mortgage application to various lenders, and works with the lender of choice until closing. Upon closing, the broker's commission comes from the borrower.
What is a Mortgage Banker?
The main difference between a mortgage broker and a loan officer is that a loan officer is employed by a lending institution (a bank, credit union, or others) to process loans solely from the products of that institution. There can be a variety of loans types to choose from even though all are products of that specific lending institution.
Your mortgage banker will represent you to the bank or other lending institution. From choosing a loan program to closing, a loan officer will help you through the process. Lending institutions compensate the mortgage bankers with a salary or commission.
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