Know what to expect: Mortgage Brokers vs. Loan Officers

Either a mortgage broker or a mortgage banker may assist you when you're looking to get a mortgage loan. Because both a mortgage broker and lending officer can help you purchase your new home, people sometimes confuse the two. However, it is important to know the ways they differ so you have clear expectations of them as you enter your mortgage application process.

About 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. 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, private 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 a private investor. You work with a mortgage broker to analyze your financial situation and find the lender who has the right mortgage loan for you. You deliver your mortgage application to your broker, who submits it to several lenders. Your mortgage broker then guides your work with the lender chosen until closing. The broker gets a commission from the borrower at closing.

About Loan Officers

Lending Institutions (banks, finance companies, and others) employ loan officers to offer, and process mortgage loans solely on behalf of that particular institution. They may have the ability to offer loans to fit a variety of situations, but all the loans are products from the same lender.

Also called a "loan representative" or "account executive," a mortgage banker represents the borrower to the lender. The borrower is guided through the entire process, from finding a loan to closing, by the mortgage banker. Either a salary or commission is paid to loan officers by their employers.

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