Mortgage Broker or Mortgage Banker
When you're looking to get a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. People can confuse these since both will reap the same outcome: a new home. However, understanding the differences between them is useful to the mortgage loan process.
What is a Mortgage Broker?
A mortgage broker (either a company or an individual) is an independent agent for the mortgage loan applicant as well as the lender. Your mortgage broker will stand as coordinator between you and the lending institution; which can be a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. You use a mortgage broker to look at your financial circumstance and find the lender who has the best mortgage loan for you. You give your mortgage application to your broker, who offers it to a number of lenders. Your mortgage broker then helps you work with the lender of choice until closing. At closing, the broker's commission comes from the borrower.
About Mortgage Bankers
The most important difference between a mortgage broker and a loan officer is that the latter works for a lending institution (a bank, credit union, or others) to process loans only from that institution. They may have the ability to market loans to fit a variety of situations, but all the loans will be programs of the same lender.
A loan officer (also known as an "account executive" or "loan representative") represents the borrower to the lending institution. A mortgage banker will guide you through the application, processing and loan closing. Either a salary or commission is given to mortgage brokers by their employers.
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