How to Identify the Different Types of Loan Professionals

You will deal with a mortgage banker, broker or loan officer if you want to get a home loan.  Before you apply, make sure to identify the differences between these professionals.  With their help, you might be able to get a deal that is favorable for you. 

So whether you are trying to get a mortgage or refinancing your existing mortgage, knowing the differences between these professionals is very important.  Before you apply for a loan, make sure to understand who is serving you and guiding you in your home buying decisions. 


A Closer Comparison


Do not be surprised if you discovered that loan officers who work for banks are not required to hold licenses.  They are different from mortgage brokers because brokers are required to have a license. 


In the case of mortgage brokers, these professionals work as freelance agents.  They usually get their commissions or fees by matching you with different types of home loans.  Brokers will get a very hefty fee or commission if they clinch loans for you that are bigger, riskier, and more expensive. 


This does not mean that bankers are always better than mortgage brokers.  It does not follow also that mortgage brokers have higher level of expertise than loan officers.  So it is always best to know the differences so you can make an informed choice.  Comparing each professional will help you to spot the obvious distinctions. 


Loan Officers


Loan officers are usually employed by a credit union or bank. They can offer multiple products that can meet your mortgage needs.  Transactions through loan officers provide much convenience for consumers.  They facilitate transactions through a local bank and of course, you may get favorable rates as long as you are qualified or if you are a loyal customer. 


Mortgage Brokers


If you want to get different offers from several lending institutions, then dealing with mortgage brokers is a good option.  Brokers facilitate greater competition between different home lenders because they provide options for consumers.  Dealing with a mortgage broker is also a good option if you have been turned down by banks.  They may be able to give you more creative loan options that can not be provided by banks due to very strict guidelines.  In other words, mortgage brokers will allow you to shop for several loans that are not easily available in your locale.


Mortgage Bankers and Banks


Mortgage banks are financial institutions regulated by the state where they operate.  These banks should be licensed and they do not have depositors.  They only offer mortgage loans for consumers.  Bankers can offer competitive rates because they normally do not rely on middle men.  You can deal directly with mortgage banks which eliminates the need for brokers or officers.  The downside is that bankers can not offer special low cost loans because they can not borrow at a discount from the Federal Reserve System. 


Understanding the differences between a banker, broker, and loan officer is very important.  When dealing with them, look closely at the quality of service and products they offer.  This way, you can ensure that you will get a highly favorable deal. 

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