Know what to expect: Mortgage Brokers and Loan Officers

When you apply for a mortgage loan, you need to know the difference between a mortgage banker and a mortgage broker. People usually confuse the two as both will yield the same result: a new home. But as you enter the application process, it will benefit you if you understand their differences.

Mortgage Brokers

A mortgage broker (either a group or an individual) is an independent agent for the mortgage loan applicant as well as the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. A mortgage broker will look at your financial situation to determine which lender is the best fit for your loan needs. From application to closing, your mortgage broker works with you: submitting your mortgage application to a number of lenders, and coordinating the process with the lender through to the closing of the loan. The broker gets a commission from the borrower when the loan closes.

Loan Officers

Lending Institutions (banks, finance companies, and others) employ loan officers to offer, and process loans solely from that particular institution. While a loan officer may market quite a range of loans, they all are programs with that lender alone.

Also known as a "loan representative" or "account executive," a loan officer represents the borrower to the lender. The mortgage banker will guide you through the selection, processing and closing of the loan. Lenders pay their loan officers a commission or salary.

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