West Palm Beach Mortgage, Broker, Loan Officer

Mortgage Broker vs. Mortgage Banker

When you apply for a mortgage loan, you should know the difference between a mortgage banker and a mortgage broker. Because both a mortgage broker and mortgage banker will help you fund a new home, it's understandable to confuse the two. But for your application process, it will help if you understand how they differ.

What is a Mortgage Broker?

A mortgage broker (either a company or an individual) is an independent agent for the mortgage loan borrower as well as the lender. A mortgage broker coordinates things for you and your lender, which can be one of the following: a credit union, bank, trust company, finance company, mortgage corporation 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, private investor. You work with a mortgage broker to analyze your financial circumstance and find the lender who has the right loan program for you. You deliver your mortgage application to your broker, who offers it to several lenders. Your mortgage broker then assists your work with the lender of choice until closing. The broker receives a commission from the borrower at closing.

What is a Loan Officer?

The most important difference between a mortgage broker and a mortgage banker is that a mortgage banker works on behalf of a lending institution (a bank, credit union, or others) to process loans only originated from the programs of that institution. There may be an assortment of loans types to choose from although all are programs of that particular lender.

Also known as a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lending institution. From finding a loan program to closing, a loan officer will walk a borrower through the process. Lenders compensate the mortgage bankers with a commission or salary.

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