A mortgage loan originator is different from a mortgage banker in that the originator will not make a decision to approve or deny you a loan. When you need to get a mortgage, there are so many options that it can be overwhelming. Your choice can have a big impact on the amount of time you spend buying a mortgage and how much you end up paying. By knowing the basic differences between three types of mortgage professionals: mortgage brokers, loan officers, and mortgage bankers, you can find out who can save you the most time and money.
Mortgage Brokers Will Look For Mortgages On Your Behalf. They can save you time and money by looking for the best deals available to someone with your financial profile, assuming you are honest, good at your job, and have relationships with many mortgage lenders. A little confusing, both individuals and companies that fulfill this role are called mortgage brokers. A Mortgage Broker Doesn't Lend You Money and Doesn't Approve Your Loan Application.
However, they will collect information about your income, financial obligations, and credit rating to see what types of loans you might qualify for and which lenders will offer you a loan. If a mortgage broker finds a loan that you want to proceed with, they will be the middleman between you and the lender. They will take your completed application, compile your supporting documents, and transmit any requests for additional information from the lender's underwriting department. Loan officers work for companies such as banks, credit unions, or direct online lenders that lend money to borrowers to buy and refinance homes.
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. They may also be able to offer you different combinations of interest rates, points and opening fees for certain credit products. However, unlike brokers, all of these loans will come only from the loan officer's company, so your selection will be smaller. To receive offers from multiple lenders, you'll need to work with several loan officers at different companies.
If you choose to go ahead, a loan officer will take your loan application and submit it to your company's insurance department. They will be the middleman between you and the insurer, and they will help you close. Throughout these steps, a loan officer performs the same role as a mortgage broker. The Big Difference Between Working With a Mortgage Broker vs.
A loan officer comes at the beginning, during the buying phase, where you are trying to find the best deal on a mortgage. A mortgage banker can originate all types of loans, so you will have many options in terms of loan products, just like you would with a mortgage broker or some loan officers. In addition, they work with all types of applicants, including those who need an FHA loan because of their more relaxed qualifications or military service members who want a VA loan. The best way to choose between a mortgage broker, a loan officer, and a mortgage banker is to talk to all of them.
Many people are intimidated by the unknown mortgage process that they don't turn around. It's a big mistake that can cost you thousands of dollars, if not tens of thousands of dollars. You can and should seek quotes from more than one broker, more than one banker, and several loan officers. Set aside one day, or two consecutive days, to collect all your quotes.
Market conditions change frequently, as does your credit report. You won't be able to make accurate comparisons if you receive quotes days or weeks apart. That said, if you don't have a salaried job, a credit score of 700, and a low debt-to-income ratio, you can save time by bypassing loan officers. If you are self-employed, retired, using assets instead of income to qualify, or belong to some other innovative applicant category, a mortgage broker or mortgage banker may be better suited to you.
They typically have the experience and relationships to quickly find the right funding source and have more options to choose from than loan officers. Mortgage brokers also originate loans, but in a different capacity. Mortgage Brokers Don't Underwrite or Finance the Loan. Instead, they function as a neutral third party that brings together the borrower and the bank.
Brokers work with hundreds of lenders, giving borrowers more options to find a suitable loan. The mortgage broker takes a borrower's request to determine which mortgage products from different lenders work best for your situation. PLEASE, NOTE THAT ROCKET HOMES HAS A BUSINESS RELATIONSHIP WITH ROCKET MORTGAGE AND AMROCK IN THE SENSE THAT ALL COMPANIES ARE WHOLLY OWNED SUBSIDIARIES OF ROCK HOLDINGS, INC. Working with a mortgage broker or loan officer, they both help you complete your mortgage application and guide you through the process until the loan funds are deposited.
A mortgage broker is an independent loan officer who acts as an intermediary to offer mortgage products from many lenders. Mortgage brokers don't close mortgages on their own behalf; they are the intermediaries between the person applying for the loan and the lender. Most consumers refer to mortgage brokers, mortgage banks, and loan officers as one and the same, not knowing the difference. The fees that a mortgage broker receives may not be transparent to the borrower, since they can be paid when a lender charges you a higher interest rate.
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. By collecting several loan estimates (ideally, at least three to five) for the same mortgage product and loan term, you can directly compare interest rates and charges and see which option will be the most affordable. Larger mortgage bankers provide mortgage services, while smaller mortgage bankers tend to sell rights. Mortgage bankers are the financial institutions responsible for lending the money people need for housing or business.
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. A mortgage banker is a person or entity that originates, finances, and sometimes services mortgage loans. Mortgage bankers must pass an exam to become a certified residential mortgage bank through the Mortgage Bankers Association (MBA).