When seeking financing to buy a home, many homeowners work with either a mortgage broker or a mortgage banker. While the terms are often used interchangeably, brokers and bankers play different roles in the mortgage industry.
Here is a quick guide to mortgage bankers to help you learn more:
While they have similar names, mortgage brokers and mortgage bankers have very different jobs. A mortgage broker will assist you in finding a good deal on mortgage loans from multiple lenders. A mortgage banker actually originates and funds the loan.
Unlike banks, mortgage brokers are not financing loans themselves — they simply help you choose a loan that best suits you. A lender uses their cash to provide borrowed money, while the broker provides only assistance from the lender to the borrower.
Mortgage bankers usually work for banks in a specific lending department. Their work involves evaluating mortgage applications to determine if a potential borrower meets the financial institution requirements. Some mortgage bankers specialize in a specific type of mortgage, which can be helpful for borrowers with unique circumstances.
Mortgage bankers may also service or sell loans. As a loan servicer, they handle the payment processing aspect of the loan. This can include managing escrow accounts and providing payoff letters.
Some mortgage bankers sell loans to third-party servicers. This gives them a better opportunity to provide loans to additional borrowers, since it frees up their cash on hand.
How do you choose between a mortgage banker and a mortgage broker? There are advantages and disadvantages to both options, and much of the choice comes down to personal preference.
However, understanding the way a mortgage banker works in comparison with how a mortgage broker works will help loan applicants make the best decision for their financial future.
Experienced Realtor, Vicky Kustov, currently serves buyers and sellers located in and around Burlington and surrounding towns. Always holding client satisfaction as her highest priority, Vicky works hard to make the entire home buying and selling experience as productive and enjoyable as possible. Clients working with Vicky never fail to appreciate her consistency, professional integrity, and fierce efficiency.
