You are ready to buy a house. You have done your research and you know what kind of loan you want. But then you start wondering, who exactly is going to help you get this loan? Is it a mortgage broker or a mortgage loan officer? It’s important to understand the difference between these two roles because they will have a big impact on your home-buying experience.
In this article, we will explore the differences between a mortgage broker and a lender in more detail. We will also discuss the difference between a broker and a lender. If you are in the market for a home loan, you may be wondering whether it’s better to work with a mortgage broker vs. a mortgage loan officer. Both professionals can help you get a good deal on your home loan, but there are some key differences between them.Mortgage brokers are independent contractors who work with multiple lenders to find loans for their clients. Mortgage loan officers are employees of banks or other financial institutions.
They have more experience working with different types of loans and lenders, so they may be able to get you a better deal on your loan than a mortgage loan officer. However, mortgage brokers typically charge higher fees than mortgage loan officers.
What is a Mortgage Broker?
A mortgage broker is a professional who helps borrowers find the best mortgage loans and terms for their home purchase. Mortgage brokers work with a variety of lenders to find loan products that fit the borrower’s needs and budget. So, what is a mortgage broker vs a lender difference?
Borrowers working with a mortgage broker can expect personalized service and advice throughout the home loan process. Mortgage brokers are required to have a license in order to operate, and must adhere to strict industry regulations.
When shopping for a home loan, it’s important to compare offers from multiple lenders to get the best deal. A mortgage broker can help you compare loans from different lenders and find the one that best suits your needs. Just remember that you can choose between a mortgage broker and vs. mortgage banker.
When Does a Mortgage Broker Make Sense?
When you are ready to buy a home, you have two main options for securing financing: working with a mortgage broker or dealing directly with a mortgage loan officer (MLO). Both can get you a loan, but they work in different ways.
Mortgage brokers are middlemen who work with multiple lenders to find you the best deal on a home loan. They are paid by the lender, not by you, and they are typically only involved in the initial stages of getting you a loan.
So, now that you know more about broker vs. lender, the decision of getting a mortgage broker depends solely on you. In most cases, getting a mortgage broker makes sense if you don’t want to hassle with the tiring process of going through the bank.
In case you have bad credit or are looking for more specialized loan products (like jumbo loans or investment property loans), working with a mortgage broker may be your best bet. Mortgage brokers have more experience helping borrowers with less-than-perfect credit get approved for loans, and they also have access to more niche products that may not be available through your bank or credit union.
Also, choosing to work with a mortgage broker vs. a bank is better, since you are paying only the lender and not both of them.
What is a Loan Officer?
A loan officer is a professional who helps potential borrowers navigate the mortgage process. Loan officers typically work for banks or other financial institutions. Their job is to help borrowers find the best mortgage products and terms that fit their needs.
They must be licensed in most states. On top of that, they must complete 20 hours of pre-license education and pass a state-specific exam. Loan officers must also complete continuing education courses every year to stay up to date on industry changes.
MLO typically earns a salary plus commission. The average salary for a loan officer was $63,650 in 2019, according to the U.S. Bureau of Labor Statistics. The commission varies depending on the financial institution and product sold, but it can range from 0.25% to 2% of the loan amount.
When Does a Loan Officer Make Sense?
A loan officer works with a single bank or lender and can offer you a range of loan products from that one institution. A mortgage broker, on the other hand, has relationships with multiple lenders and can offer you a wider selection of loan products to choose from.
So, when does it make sense to work with a loan officer? If you have good credit and are looking for a straightforward loan product, working with a loan officer at your bank or credit union can be a good option. Loan officers can also be a good resource if you are not sure what kind of loan product you need since they can help you assess your needs and match you with the right product.
Mortgage Broker vs. Mortgage Loan Officer: Which is Better?
If you are in the process of buying a home, you may be wondering if you should work with a mortgage broker or a mortgage loan officer. Both professionals can help you get a mortgage, but there are some key differences between the two.
Mortgage brokers are middlemen who work with multiple lenders to get you the best deal on your mortgage. Mortgage loan officers are employees of banks or other financial institutions who can only offer loans from their employer.
Once you have found a home and are ready to apply for a mortgage, you will likely work directly with an MLO at a bank or other lending institution. Mortgage loan officers are employees of the lender and are paid a salary plus commission.
While both mortgage brokers and MLOs can save you time and effort in the home-buying process, there are some situations when working with a broker makes more sense.
If you have bad credit or are self-employed, for example, it may be difficult to get approved for a loan on your own. In these cases, using a broker can give you access to more lenders and better interest rates. Brokers can also be helpful if you’re looking for a specific type of loan that isn’t offered by your local banks.
On the other hand, mortgage loan officers can help you if you have good credit and are looking for a straightforward loan product, working with a loan officer at your bank or credit union.
At the end of the day, the decision lies solely on you. But now that you know the difference between mortgage broker vs. lender vs. mortgage loan officer, you can make an informed decision.
Choosing between a mortgage broker or a bank can be a tiring thing to do. Because of that, we have made this article. Here you will find all the needed information so you can make the best decision.
We do recommend you always do the needed diligence and research before making a decision on which one to go with.