Know the difference: Mortgage Brokers vs. Loan Officers

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When it comes to locating a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. Because both give the same outcome (a new home), it's understandable to confuse them. But as you enter your application process, it can help if you understand how they differ.

Mortgage Brokers

A mortgage broker (either a firm or an individual) is an independent agent for the mortgage loan applicant as well as 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, private 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 an individual investor. A mortgage broker can consider your numbers to find out which lender is the best fit for you. From application to closing, your mortgage broker facilitates the loan process: submitting your loan application to a number of lenders, and walking you with the chosen lender through to the closing of your loan. The borrower gives a commission to the broker upon closing.

Loan Officers

Loan officers are representatives of a particular lending institution (such as a bank) who work with mortgages and other loan products originated by their company alone. While a loan officer may promote quite a range of loan programs, they will be products from that one lender.

Also known as a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lender. The borrower is walked through the whole process, from loan selection to closing, by the loan officer. Either a salary or commission is given to loan officers by their employers.

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