A loan officer works for a bank, credit union, or other mortgage lender, and will only offer mortgage programs and rates available at that institution. A mortgage broker works on behalf of the borrower to find the best rate and loan from several institutions. Loan officers are employees of the lender, while mortgage brokers are independent of the mortgage company. The loan officer usually receives a salary, a commission, or a combination of both.
Mortgage brokers receive compensation from the borrower, the lender, or both. The fees a mortgage broker receives may not be transparent to the borrower because they can be paid when a lender charges you a higher interest rate. 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 officer comes at the beginning, during the buying phase, where you try to find the best deal on a mortgage.
Choosing Between a Mortgage Broker and a Loan Officer Depends on Your Homebuyer Goals. If you're willing to explore different lenders, a mortgage broker can be a point of contact to consider. If you've chosen your lender and are ready to explore your mortgage options, a loan officer can help lead the way. Whether you work with a loan officer or choose to work with a mortgage broker, both professionals can help you navigate the home buying process with ease.
MLOs gain a wide variety of knowledge about the different types of mortgage loans and use this information to help their customers choose the best loan for their specific situation. The mortgage broker takes a borrower's request to determine which mortgage products from different lenders work best for your situation. Most mortgage loan originators are paid on a commission basis, but compensation may vary from office to location. Some banks offer giant mortgage loans, which is a loan that exceeds the limits set by Fannie Mae or Freddie Mac.
Mortgage brokers are always employed by a brokerage agency and not by a bank, which prevents them from approving or denying a loan. They typically have the experience and relationships to quickly match you with the right funding source and have more options to choose from than loan officers. If you qualify for a loan at your institution and decide to go ahead with this mortgage, the insurance department will give you your documents until closing. They may also be able to offer you different combinations of interest rates, points, and opening fees for certain credit products.
If you already know your target lender and are comfortable moving forward on your own, a loan officer can help. Mortgage brokers are paid through commissions and fees, and they often charge about 1 to 2% of the amount. Now, you are considering turning to a mortgage broker or loan officer to help you find the right mortgage for your needs. A loan officer is very familiar with the products they offer because they specialize in a smaller number of products offered by an institution.
If you're ready to speak with a loan officer, contact Arthur State Bank for personalized mortgage information today. Some brokerage houses have a limit on the dollar amount an MLO can make with a single loan, which is negotiated along with its commission. A broker will review offers from a variety of bankers and lenders to find the best deal and will usually charge additional fees for their services.
