Know the difference: Mortgage Brokers and Loan Officers
When you need a mortgage , you should know the difference between a mortgage broker and a mortgage banker. As both a mortgage broker and mortgage banker can help you purchase your new home, people can confuse the two. Yet it will be helpful to understand the difference between them so you know what to expect from them as you enter the mortgage process.
About Mortgage Brokers
During the mortgage loan process, an individual or group who is an independent agent for both mortgage loan borrower and lender is a mortgage broker. Your mortgage broker will stand as facilitator between you and the lending institution; which can be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. Which lender offers the mortgage loans that fits your needs? A mortgage broker will lead you to the best one. You give your loan application to your broker, who presents it to various lenders. Your mortgage broker then guides your work with the lender chosen until the loan closes. Upon closing, the broker's commission is paid by the borrower.
Loan officers are representatives of a specific lending institution (such as a bank, credit union, etc.) who process mortgages and other loan products for their place of employment alone. While a mortgage banker may promote quite a range of loans, they are all products from that specific lender.
Also called a "loan representative" or "account executive," a mortgage banker represents the borrower to the lending institution. A loan officer will walk you through the selection, processing and loan closing. Mortgage bankers may be compensated with a commission or salary for their services by their employers.