Know what to expect: Mortgage Brokers vs. Mortgage Bankers

When you're looking to get a mortgage loan, 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 loan officer, it's easy to confuse them. However, it is valuable to understand the difference between the two jobs so you have clear expectations of them during the mortgage application process.

Mortgage Brokers

A mortgage broker is someone or firm that is an independent agent for the mortgage loan applicant as well as the lender. A mortgage broker coordinates things between you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. A mortgage broker will review your numbers to find out which lender is the best fit for you. You deliver your mortgage application to your broker, who submits it to one or more lenders. Your mortgage broker then guides your work with the lender chosen until the loan closes. The broker gets a commission from the borrower when the loan closes.

What is a Mortgage Banker?

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to market, and process mortgage loans solely originated by that specific institution. There may be a wide variety of loans types to choose from although all are programs of that specific lender.

A mortgage banker represents you to the bank or other lending institution. A mortgage banker can walk you through the selection, processing and loan closing. Either a salary or commission is paid to loan officers by their employers.

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