When it comes to locating a mortgage , you need to know the difference between a loan officer and a mortgage broker. Because both a mortgage broker and mortgage banker can help you buy your new home, it’s common to confuse the two. Yet recognizing the ways they differ will be useful to the mortgage loan process.
What is a Mortgage Broker?
During the mortgage loan process, an individual or company who is an independent agent for the mortgage loan applicant as well as the lender is a mortgage broker. Your mortgage broker will stand as facilitator between you and the lending institution; which can be a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. A mortgage broker can look at your financial situation to find out which lender is the best fit for you. Your broker will submit your mortgage application to several lenders, and works with the lender of choice until closing. If the loan closes, the broker’s commission comes from the borrower.
Lending Institutions (banks, finance companies, and others) employ loan officers to market, and process loans from that particular institution alone. While a loan officer may market quite a range of loan programs, they will be programs with that lender alone.
A loan officer (also known as an “account executive” or “loan representative”) represents the borrower to the lender. The mortgage banker can guide you through the selection, processing and closing of the loan. Lenders give their loan officers a commission or salary.