Know the difference: Mortgage Brokers and Mortgage Bankers
Either a mortgage broker or a mortgage banker may help you when you apply for a mortgage . Because both yield the same result (a new home), people often confuse the two. However, it will be helpful to understand the difference between them so you know what to expect from them as you enter the mortgage process.
A mortgage broker is a person or group that works as an independent agent for both the mortgage loan borrower and the lender. Your mortgage broker will stand as coordinator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. A mortgage broker can look at your numbers to find out which lender is the right fit for you. You give your loan application to your broker, who presents it to various lenders. Your mortgage broker then guides your work with the lender of choice until closing. The borrower submits a commission to the broker if the loan closes.
About Mortgage Bankers
Loan officers are representatives of a specific lending institution (such as a bank, credit union, etc.) who process mortgages and other loan programs from their employer alone. There may be a wide range of loans types to draw from even though all are products of that specific lender.
Your mortgage banker will represent you to the bank or other lending institution. The borrower is helped through the entire process, from choosing a loan to closing, by the loan officer. Loan officers may be paid a commission or salary for their work by their employers.
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