Know the difference: Mortgage Brokers and Loan Officers
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Either a mortgage broker or a loan officer can work with you when you work on your application for a mortgage loan. People sometimes confuse them because both will reap the same outcome: a new home. Yet understanding how they differ is useful to the mortgage loan process.
What is a Mortgage Broker?
A mortgage broker (either a firm or an individual) is an independent agent for both the mortgage loan borrower and the lender. A mortgage broker coordinates things between 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 a private investor. A mortgage broker will look at your finances to find out which lender is the right fit for your loan needs. From application to closing, your mortgage broker works with you: submitting your loan application to several lenders, and coordinating the process with the lender through to the closing of your loan. The broker gets a commission from the borrower upon closing.
About Loan Officers
Lending Institutions (banks, finance companies, and others) employ loan officers to offer, and process loans from that particular institution alone. There can be a wide range of loans types to draw from even though all are programs of that particular lending institution.
A loan officer (also known as an "account executive" or "loan representative") acts on behalf of the borrower to the lender.
From choosing a loan program to closing, a loan officer can guide the borrower through the process. Loan officers are given a commission or salary for their work by their employers.
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