Know what to expect: Mortgage Brokers and Mortgage Bankers

When it comes to finding a mortgage , you may work with a mortgage banker 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 mortgage banker, people usually confuse the two job types. However, understanding how they are different is helpful to the mortgage loan process.

Mortgage Brokers

During the mortgage loan process, an individual or group who is an independent agent for both mortgage loan applicant and lender is a mortgage broker. A mortgage broker facilitates things for you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. You partner with a mortgage broker to analyze your financial circumstance and lead you to the lender who has the best mortgage loan for you. From application to closing, your mortgage broker facilitates the loan process: presenting your mortgage application to several lenders, and walking you with the chosen lender through to the closing of the loan. The borrower submits a commission to the broker at closing.

Mortgage Bankers

The most important difference between a mortgage broker and a loan officer is that the latter works on behalf of a lending institution (a bank, credit union, or others) to process loans only from that institution. They may be able to promote loans to fit a variety of situations, but all the loans will be products from the same lender.

A mortgage banker (also called an "account executive" or "loan representative") represents the borrower to the lending institution. A mortgage banker can walk you through the selection, processing and closing of the loan. Loan officers will be paid a commission or salary for their work by their employers.

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