What is the difference between a mortgage banker and a mortgage broker?
A Mortgage Banker lends their own money to you to buy a home. A Mortgage Broker works with many different lenders to find a company to lend you the money to purchase a home. There are advantages to both. Since a Mortgage Banker, is lending their own money, they MIGHT be able to get you better terms or possibly lend you money even if your credit isn’t perfect. “Might” is the key word. You’ll need to shop around if that’s what you need. And that is what a mortgage broker does, shops around for a lender that fits your needs. They work with multiple lenders, so often they can find the best terms and conditions. The choice of a lender is ultimately up to you. Get recommendations from your realtor, and your friends and family.
A mortgage banker is a direct lender because it lends you its own money; they may also sometime sell off these mortgages on the secondary market in order to reduce risks. Mortgage bankers are also the ones responsible for servicing your loans once the borrowed money has been disbursed to you. A mortgage broker is a middleman, just like a real estate agent; he does the loan shopping and analysis for the borrower and puts the lender and borrower together. Using a mortgage banker does not mean that you can shave off extra closing fees that might be generated from using a middle man, because a mortgage broker often does not charge any fees for his service. A mortgage banker can give you direct loan approval, whereas a broker gives you information second-hand. However, many mortgage banks are limited in what they can offer, which is essentially their own product. In addition, if you present your loan application in a poor light, you’ve already made a bad impression. I am not suggesting you
A Mortgage Banker (or Lender) is often associated with a Bank. They do all of their lending functions “in-house” but are limited to only the loan programs their banks have. A Mortgage Broker has accounts with numerous banks/lenders and can choose the lender program best suited to satisfy the borrower’s needs.
Mortgage bankers originate, and “fund,” the mortgages that they sell, meaning they put up the money and handle the closing for the loans. Mortgage brokers are middlemen who shop different originators to find the deal that best suits their customers. Walden Mortgage Group is a correspondent lender, which means we have a direct lending relationship which enables us to work directly with the source of the money to ensure prompt closings. Our broker relationships also allow us to be flexible in our product lines and pricing. We have the best of both worlds!
Related Questions
- How do I file a complaint against a mortgage broker, mortgage banker, mortgage agent, escrow agency, escrow agent, loan modification consultant, foreclosure consultant or covered service provider?
- Is Absolute Mortgage Processing a mortgage broker/banker?
- Mortgage Banker VS Mortgage Broker - Whats the Difference?
