Doing Your Homework
Need a loan to purchase your property? Know the differences between mortgage brokers and bank loan officers.
Bank Loan Officers
Loan officers at banks, credit unions or other lending institutions are employees who work and process mortgages that are originated by their employer. They are often paid a salary plus commission. The loan officer is limited to their own bank loan programs and guidelines. Rarely does a bank have the versatility or expanded solutions for loans since they are the lender.
Mortgage Brokers
Mortgage brokers are licensed professionals who are paid a fee to bring together lenders and borrowers. They usually work with dozens or even hundreds of lenders, not as employees, but as freelance agents. Think of Mortgage Brokers as your scouts. They find and evaluate each person's credit and financial situation to determine which lender is the best fit for that person's needs. The broker may submit the home buyer's application to one or more lenders. A good mortgage broker can find a lender for just about any type of credit or situation. The mortgage broker earns a fee only if they get the transaction approved. Because brokers buy at wholesale prices they can meet or beat the retail bank rates.
Which Should You Use?
"Me, best of both worlds. I'm a direct lender, but I also can broker loans." A local or online mortgage broker/banker may find you a lender in any part of the country, but a local broker can meet with you on a one-to-one basis. Out of town banks don't understand all local heating systems, insurance requirements, septic & water systems, assessments, etc.. Mortgage brokers/banker can often find a lender who will make loans that bank refuses. Loans for unique properties are also easier to secure through a mortgage broker.
« Back to Resources