Mortgage Banker versus Mortgage Broker

http://annettapowellblog.com - Few years back, you had to go to your local bank to apply for a mortgage. These days, you could apply for a mortgage through a mortgage broker, a trade association, a credit union or even through a professional association which you belong to. With all these available help, you might wonder which is truly the best for you and where and how to begin. Approaching a mortgage banker or broker is a good head start but unfortunately, most people could not distinguish the difference between these two.

A mortgage broker is simply a person who connects a lender and a borrower by acting as a home buyer and a lender’s matchmaker. In most cases, he brings together and completes the mortgage applications and negotiates the terms thereof with the lender on behalf of the borrower. You can think of a broker as a scout who finds and evaluates a home buyer and analyzes the buyer’s credit worth in order to determine the best lender to work with until the loan comes to an approval. The broker is paid once the loan is closed and he has no further responsibilities over it anymore.

A mortgage banker, on the other hand, is the lender himself who releases the loan directly to the borrower. Whether you go through a broker or not, the mortgage banker is still the one who makes the ultimate decision to lend you the money. Mortgage brokers operate with significantly fewer assets than bankers who have to keep a large capital to enable them to meet the needs of their borrowers.

Most homeowners choose bankers when it comes to getting a mortgage while those who fear to not qualify for a mortgage seek the assistance of a broker. 

Working with a mortgage banker helps you build a direct relationship which could be beneficial in terms of getting discounts or good payment conditions. The advantages of working with brokers are that they are easy to contact and they could disclose all the information regarding the loan, premiums, rates, etc. while doing almost all the processes for you. 

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