Know the difference: Mortgage Brokers vs. Loan Officers

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Either a mortgage broker or a loan officer can assist you when it comes to finding a mortgage loan. Because both a mortgage broker and lending officer can help you fund a new home, it's easy to confuse them. Yet it is helpful to know how they differ so you know what to expect from them during your mortgage application process.

About Mortgage Brokers

During the mortgage loan process, an individual or company who is an independent agent for both mortgage loan borrower and lender is a mortgage broker. 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 a private investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. You partner with a mortgage broker to analyze your financial circumstance and lead you to the lender who has the right loan program for you. From application to closing, your mortgage broker works with you: submitting your application to several lenders, and walking you with the chosen lender through to closing. At closing, the broker's commission is paid by the borrower.

Loan Officers

The main difference between a mortgage broker and a loan officer is that the latter works on behalf of a lending institution (a bank, credit union, or others) to process loans solely originated from the products of that institution. Although a loan officer may market quite a range of loans, they all are products of that lender alone.

A loan officer represents you to the bank or other lending institution. From choosing a loan program to closing, a loan officer can guide you through the process. Loan officers can be compensated with a commission or salary for their services by their employers.

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