What is the difference between a mortgage broker and a mortgage banker?
Simply put, a Mortgage Broker is a retailer of wholesale mortgage loan products. That is, a Broker can offer a large selection of mortgage loan products from many mortgage lending sources (i.e. banks, savings banks, mortgage bankers). Brokers receive their mortgage pricing (interest rates) from the “wholesale windows” of these lending institutions. This arrangement enables Brokers to offer competitive interest rates on a large and diverse menu of mortgage loan products. In comparison, a bank’s loan officers are usually restricted to offering just that particular bank’s loan products. This is an important advantage when considering the recent explosion of new mortgage loan products available in the market. An experienced Mortgage Broker has the product line and expertise to design a financing package “custom fit” for the Borrowers’ unique purchase or refinance objectives. As mentioned, a Mortgage Broker receives pricing at a wholesale level.
• A mortgage banker is a lender that has the ability to originate, underwrite, close and fund a mortgage loan. A mortgage banker may offer a variety of loan options, but usually makes the underwriting decision, prepares closing documents and funds the mortgage loan utilizing their own staff and their own funds. After the loan is closed and funded, the mortgage banker may sell the loan to an investor in the secondary market or may retain the servicing rights to the loan. Mortgage bankers are usually approved as lenders for the Federal Housing Administration and the Veterans Administration. A mortgage broker is not a lender but arranges mortgage financing through a third party. A mortgage broker may also offer a variety of loans from a variety of investors however a mortgage broker must rely on the investor they select for the loan to underwrite, close and fund the loan.
A mortgage broker is the middleman who helps match borrowers with lenders based on corresponding needs and standards. Mortgage brokers arrange more the 80% of all transactions between borrowers and lenders, yet mortgage bankers actually finance and distribute the largest portion of home loans compared to all other lenders.
A mortgage broker is the middleman who helps match borrowers with lenders based on corresponding needs and standards. Mortgage brokers arrange more than 80% of all transactions between borrowers and lenders, yet mortgage bankers actually finance and distribute the largest portion of home loans compared to all other lenders.
Simply put, a Mortgage Broker is a retailer of wholesale mortgage loan products. That is, a Broker can offer a large selection of mortgage loan products from many mortgage lending sources (i.e. banks, savings banks, mortgage bankers). Brokers receive their mortgage pricing (interest rates) from the “wholesale windows” of these lending institutions. This arrangement enables Brokers to offer competitive interest rates on a large and diverse menu of mortgage loan products. In comparison, a bank’s loan officers are usually restricted to offering just that particular bank’s loan products. This is an important advantage when considering the recent explosion of new mortgage loan products available in the market. An experienced Mortgage Broker has the product line and expertise to design a financing package “custom fit” for the Borrowers’ unique purchase or refinance objectives. As mentioned, a Mortgage Broker receives pricing at a wholesale level. Consequently, Brokers can be very competitive
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