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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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