The main difference between these securities is that mortgage brokers are employed by a sponsoring broker, while originators and mortgage loan officers are employed by a bank or mortgage company. Both mortgage brokers and MLOs are nationally authorized by the National Multistate Licensing System (NMLS). Throughout these steps, a loan officer performs the same role as a mortgage broker. The big difference between working with a mortgage broker and a loan broker comes at the beginning, during the buying phase, when you try to find the best deal on a mortgage.
Of all the parties involved in a mortgage, one of the first people you talk to is likely a home loan originator. They can also be referred to as a loan officer. If the MLO is a broker, your customers can pay you or receive a commission from the lender they partner with to close the loan. If the MLO is a loan officer, you will normally be paid an hourly rate or salary along with an accrued loan fee.
Too often, homebuyers don't understand the difference between a mortgage broker and a loan officer. A loan officer works directly for a lender, while a broker is an independent party that doesn't work for anyone. This way, a broker can apply for loans from many different parties. Loan officers help clients with the application process and are familiar with the loans offered by their financial institutions.
Unlike mortgage brokers, these people don't compare options between institutions. Instead, they focus on helping borrowers find a qualifying loan product that they can afford. They also know the rules of the banking industry and how these rules will apply to every loan application. Rocket Mortgage, LLC, Rocket Homes Real Estate LLC, RockLoans Marketplace LLC (trading as Rocket Loans), Rocket Auto LLC and Rocket Money, Inc.
Although the loan agent is the person who works with you, the lender is the institution that initially funds the loan. When you call a bank or credit union to apply for a loan, provide supporting documents, or determine if you're pre-eligible, you'll talk to a loan officer. Very few banks or other lenders have a large number of loans in their portfolio to collect payments over the life of the loan because they prefer to get money faster to grant more loans. Mortgage brokers save time and energy by accepting an application that can be purchased from several lenders.
To compare various offers from loan officers, you'll need to submit mortgage applications to different lenders to receive quotes from each lender. By working with a mortgage broker or a loan officer, both help you complete your mortgage application and guide you through the process until your loan is funded. They may be able to offer you several types of loans (Federal Housing Administration (FHA), FHA 203 (k), conventional and jumbo) if the financial institution they work for offers them. If you're self-employed, retired, using assets instead of income to qualify, or belong to some other innovative applicant category, you might be better off having a mortgage broker or mortgage banker serve you better.
Loan officers help borrowers choose which mortgage product is best for their situation, but they can only sell the mortgage products offered by their lender. Mortgage bankers take your loan application, sign it, approve it, and guide you through the closing process. National banks must have federal records and do not require individual MLOs to obtain a loan originator license. If you decide to move forward, a loan officer will take your loan application and submit it to your company's insurance department.
While the term “home loan originator” can refer to the person who originated your home loan, it can also refer to the institution responsible for funding that loan. Loan officers can be advocates and educators for borrowers, but that's because their goals are aligned. .
