A mortgage banker is a person or entity that originates, finances, and sometimes services mortgage loans. Mortgage bankers use their funds or the funds of a deposit lender to finance loans. They could keep the mortgage loan or sell it to an investor. Mortgage bankers originate real estate loans and finance them.
Mortgage bankers take your loan application, sign it, approve it, and guide you through the closing process. They will lend you the money directly or get it from a bank. They can also find the best available offer from the various banks with which they have relationships. As with brokers, a mortgage banker can refer to an individual or a company.
Mortgage bankers subscribe, approve and close loans. They can then sell the loan to retail banks, investment firms, or agencies like Fannie Mae and Freddie Mac. Mortgage bankers are more of a one-stop shop for mortgages. With access to multiple lenders, bankers can offer a variety of mortgage loans, including conventional, jumbo, FHA, VA and USDA.
Unlike traditional banks, mortgage bankers focus solely on mortgage lending without the distraction of other credit products or personal finance services. When you do business with mortgage bankers, you're working with federally licensed professionals. Licensed loan officers have chosen to sell mortgages as a profession and are well-versed in loan laws and lender guidelines and are 100% dedicated to advising you, structuring your loan, and closing the deal. When you're preparing to buy a home, you may wonder what the difference is between a mortgage banker and a mortgage broker and which one you need.
A mortgage banker lends money for a mortgage, while a mortgage broker doesn't distribute loans directly. Rather, a mortgage broker works with several lenders to connect buyers to the bank or institution they need to get a loan for their mortgage. Mortgage brokers typically charge a fee to connect buyers to. They can have information about the loan requirements, strategies and rates of several mortgage bankers, which can make it easier for buyers to choose the one that fits their needs.
Mortgage bankers work for an institution, which means they can only make loans from your institution. A loan officer comes at the beginning, during the buying phase, where you are trying to find the best deal on a mortgage. Mortgage brokers are federally licensed firms or individuals who sell loan programs on behalf of lenders. The best way to choose between a mortgage broker, a loan officer, and a mortgage banker is to talk to all of them.
Throughout the life of the loan, the mortgage banker will also be responsible for handling any issues that arise, as well as helping you negotiate if for any reason you are unable to make payments on time. Mortgage bankers close loans in their own name, using their own funds or the funds of their institutions. If a mortgage broker finds a loan that you want to proceed with, they will be the middleman between you and the lender. If you plan to buy a property and need to take out a loan to do so, a mortgage banker can originate that loan and provide you with the funds for the purchase of your home.
They work with real estate agents and loan seekers throughout the mortgage process, from evaluating the property to collecting financial information and obtaining the loan. Because they work for the lending institution that provides the money for the mortgage, mortgage bankers can make the difference between an approved loan application and a rejected loan application when there is a case where an exception or a subjective decision is required. Up to 80% of mortgage loans are sold, instead of the initial banker deciding to repay the loan himself. These companies help borrowers obtain loans through retail banks or mortgage banks and try to match you with the one that gives you the best rate and term.
Originating the loan also means processing the loan documentation and distributing the mortgage funds.