Mortgage Broker or Mortgage Banker

Either a mortgage broker or a loan officer may work with you when it's time to find a mortgage. It's easy to confuse these as both will produce the same result: a new home. But as you enter the application process, it can benefit you if you know how they are different.

What is a Mortgage Broker?

A mortgage broker (either a group or an individual) is an independent agent for both the mortgage loan applicant and the lender. Your mortgage broker will stand as a facilitator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. A mortgage broker will look at your finances to find out which lender is the right fit for your loan needs. You give your mortgage loan application to your broker, who presents it to one or more lenders. Your mortgage broker then helps you work with the lender chosen until the loan closes. The broker gets a commission from the borrower if the loan closes.

About Loan Officers

Lending Institutions (banks, finance companies, and others) employ loan officers to market, and process mortgage loans solely originated by that particular institution. Although a loan officer may offer quite a variety of loan programs, they all are programs with that one lender.

Also called a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lender. A mortgage banker can guide the borrower through the application, processing, and closing of the loan. Lenders compensate the loan officers with a salary or commission.

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