Mortgage Bankers Vs Mortgage Brokers

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Broadly speaking, many consumers out there assume the ‘mortgage companies’ are the commercial banks that provide or lend the money. Actually, a company that we deal with if we happen to be engaged in any real estate transactions is either a mortgage banker or a mortgage broker. 

By definition, a mortgage banker is technically a direct lender that lends us the money, although it often sells the loan to the secondary market. While on the other hand, a mortgage broker is a middleman (an agent) who does the loan shopping and analysis for a borrower and puts the lender and borrower together. In short, many of the lenders by whom the broker finds the loan do not deal directly with public, hence, the expression can be referred as ‘wholesale lenders’.

Obviously, using a mortgage banker can practically save us the fees of a middleman and we can execute the loan process easier by ourselves. In fact, a mortgage banker can provide us a direct loan approval, whereas a broker gives us information we need one way another. However, many of the mortgage bankers are limited in what they can offer, which is seemingly essential to pay attention on when dealing with their own product.

Apart from that, a mortgage broker charges a fee for the service offered but has access to a wide variety of loan programs. As an example, he or she may have the knowledge of how to present our loan application to different lenders for approval. However, in one particular case, there are some mortgage bankers who also act as a mortgage broker. So, being as an investor, it is wise to have both a mortgage broker and a mortgage banker on our team. Nevertheless, it might be best to keep in mind that a mortgage brokering is the unlicensed profession in many states and so in case if there is no licensing agency to complain to on behalf of our legal issue, then we are strongly advised to make our personal references beforehand prior to carrying out our business in dealing with a mortgage broker.

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3 comments:

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