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. The main difference between mortgage bankers and mortgage brokers is the way the loan is closed. Mortgage bankers close the loan in your name and use your funds (in most cases).
Mortgage brokers facilitate closing, while the lender itself closes and finances the loan. Both a mortgage banker and a mortgage broker can help you get a home loan. A mortgage banker works for a bank or similar lending institution that actually provides you with the money for the loan. A mortgage broker doesn't represent one institution, but works with many to find a loan for a specific person.
The banker is a direct lender. The broker is an intermediary between you and the lender. The jobs are similar, and the United States Federal Bureau of Labor Statistics lists both as loan officers with similar functions and salaries. A mortgage broker works with numerous lenders to offer the best loan programs for your situation.
Loan officers can only recommend the mortgage programs offered by your bank. If those programs aren't suitable, you'll need to contact another lender to find one that does. Both mortgage brokers and loan officers are considered mortgage loan originators (MLOs) and must meet strict federal requirements to help negotiate mortgage loans. This level of experience can be useful if your financial profile doesn't fit the requirements of a conventional loan that meets the credit requirements of Fannie Mae and Freddie Mac.
Mortgage brokers and mortgage bankers can help homebuyers who don't fit the conventional mold qualify for a mortgage. They are often referred to as mortgage loan officers, since they are the most complex and expensive type of loan most consumers encounter. Unlike bankers, brokers don't finance loans, they simply guide you through the process of finding the best loan for your situation. A mortgage broker helps you find a good offer from several lenders or bankers, usually at no cost to you as a borrower.
Rocket Mortgage is a non-bank lender that provides access to many different lending products to help you obtain the most attractive home loan terms. Mortgage bankers take your loan application, sign it, approve it, and guide you through the closing process. Mortgage brokers work with a wide variety of financial institutions and can offer a variety of options from banks, credit unions and other mortgage lenders. When a borrower has an extensive relationship with a bank, their best option may be to work with a loan officer from that bank.
A mortgage broker is an independent loan broker who acts as an intermediary to offer mortgage products from many different lenders. Another key difference between a mortgage broker and a mortgage banker is that the mortgage broker is paid by the buyer, while a mortgage banker earns commissions through the bank for each loan that is closed. The fees a mortgage broker receives may not be transparent to the borrower, since they can be paid when a lender charges a higher interest rate. Loan officers must have a thorough knowledge of credit products, the rules and regulations of the banking industry, and the documentation required to obtain a loan.
The Rocket Mortgage Learning Center is dedicated to providing you with articles on buying homes, types of loans, mortgage basics and refinancing. To compare various offers from loan officers, you'll need to submit mortgage applications to different lenders to receive quotes from each lender. .
