Know what to expect: Mortgage Brokers vs. Loan Officers

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. Because a new home is the result of the work of both mortgage broker and loan officer, it's understandable to confuse them. But as you begin the application process, it will benefit you if you recognize they ways they differ.

About Mortgage Brokers

A mortgage broker is an individual or company that is an independent agent for both the mortgage loan applicant 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 an individual investor. You work with a mortgage broker to analyze your financial circumstance and lead you to the lender who has the right mortgage loan for you. From application to closing, your mortgage broker facilitates your loan process: presenting your mortgage application to several lenders, and coordinating the process with the lender through to the closing of the loan. Upon closing, the broker's commission comes from the borrower.

Mortgage Bankers

The main difference between a mortgage broker and a loan officer is that the latter works for a lending institution (a bank, credit union, or others) to process loans solely originated from the programs of that institution. Although a mortgage banker may offer quite a variety of loan programs, they all are programs from that one lender.

A mortgage banker represents you to the bank or other lending institution. The mortgage banker can walk you through the selection, processing and closing of the loan. Loan officers are paid a commission or salary for their services by their employers.

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