Mortgage
Lenders, Mortgage Brokers, Loan Officers
Mortgage
Lender
A
mortgage
lender is the institution that provides the money to the borrower
at closing.
The borrower in turn, will sign a note
provided by the lender stating their debt,
their obligation to pay, and acknowledging that a lien has been placed
on their property.
In
the event that the borrower defaults
on the loan, the lender will begin the process of foreclosing.
Mortgage
Broker
Mortgage
brokers do not lend money. They are independent contractors who will
shop lenders and rates for a consumer. The majority of mortgage brokers
deal with literally hundreds of lending institutions called wholesalers.
Mortgage
brokers also counsel people on mortgage
products that are available from different lenders. For instance,
if a consumer has a special situation such as poor
credit, the broker will assist in counseling the borrower and finding
them the best possible rate from a lender with a program to fit the borrowers
needs.
A
broker will also handle the complete processing of the loan including
pulling credit,
ordering the appraisal,
verification of employment
and assets,
etc.
A
lender who processes all of the loan paperwork
on their own is called a retail
lender. A lender who uses a broker to find them customers and handle
the paperwork is called a wholesale lender.
Loan
Officer
Loan
officers work for both lenders and brokers. Although loan officers
are employees, they act more like independent contractors and are compensated
on a commission
basis.
Working
with a mortgage broker is not a bad idea for someone who wants to shop
around for the best deal. Mortgage brokers deal with hundreds of lenders
and can shop for the best
rate on any given day.
A
mortgage broker can also fit you into a particular niche if your situation
is a special or complicated one.
When
dealing with a lender only, you only get the option of whatever it is
they have to offer.
House
Or Mortgage - What Should I Shop For First?
Whom
Can You Trust?
Principal
Interest and Term
What
A Broker Does
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