Mortgage Broker or Mortgage Banker

When you need a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. Because both a mortgage broker and mortgage banker can help you buy your new home, it's understandable to confuse the two. Yet it will be useful to understand the difference between them so you know what to expect from them during the mortgage process.

What is a Mortgage Broker?

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 credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. Which lender has the loan programs that is right for you? A mortgage broker will help you find the best fit. You deliver your application to your broker, who offers it to several lenders. Your mortgage broker then guides your work with the lender chosen until the loan closes. The borrower pays a commission to the broker when the loan closes.

About Mortgage Bankers

Mortgage Bankers are representatives of a particular lending institution (such as a bank) who process mortgages and other loan products from their place of employment alone. They may have the ability to market loans to fit many different situations, but all the loans will be programs from the same lender.

Also called a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lending institution. The mortgage banker will help you through the application, processing and loan closing. Lenders pay their loan officers a salary or commission.

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