Mortgage Broker Vs. Mortgage Banker

By admin · Wednesday, July 1st, 2009

Many consumers think that “mortgage companies” are banks that lend their own money as mortgage. But in fact, any company that you deal with might be either a mortgage banker or may be a mortgage broker.

Mortgage Banker: A mortgage banker is a direct lender, which lends you its own money, although it may often sells the loan to the secondary market. Mortgage bankers (otherwise known as “direct lenders”) sometimes keep servicing.

Mortgage broker: A mortgage broker is actually a middlemen; he first does the loan shopping and analysis for the borrower and then puts the lender and borrower together. Most of the lenders by which the broker finds loans do not deal directly with public.

If you go through mortgage banker, you would save the fees of middleman and could make the loan process quite easier. A mortgage banker would give you direct approval of loan, whereas a mortgage broker gives you information second-hand. But anyhow, many mortgage bankers have their own limitation in what they can offer. An in case, if you present your loan application in poor light, it would lead to a bad impression in front of banker. It is not suggested to lie or mislead a lender, but one need to understand that presenting a loan to a lender is just like presenting your taxes to the IRS; all documents should be valid one.

A mortgage broker charges dramatic fee for every service, but then he has access to wide variety of loan programs. He would also have knowledge of how to present your loan application to various lenders for approval. Some of mortgage bankers are brokers as well. As an investor it is always wise to have both mortgage broker and a mortgage banker on your side. You all need to remember that mortgage brokering is an unlicensed profession in many of the states.

Caroline Mercy is a SEO copywriter for California Health Online as well. She has involved herself in this field for more than 3 years. For further details related to the article you can visit the site http://www.mtgoptions.ca/. . You can contact her through mail at caroline.mercy@gmail.com

Caroline Mercy
http://www.articlesbase.com/mortgage-articles/mortgage-broker-vs-mortgage-banker-79552.html


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Comments

By nithya k on July 1st, 2009 at 9:03 am

What is the difference between Mortgage Banker and a Mortgage Broker?

By sevenfourteenkim on July 1st, 2009 at 2:05 pm

A banker is whom you get the loan from directly. A broker is a middle man who will help you choose a mortgage company for your needs, and will most likely charge a fee for the service.
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By reetsie on July 1st, 2009 at 2:07 pm

mortgage banker works for the bank the broker is a middleman
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By jamesnbarnes on July 1st, 2009 at 2:09 pm

Just to make it clear, EVERYONE is a middleman, both the broker and the banker because noone is getting the loan directly from Wall Street or the insurance company they both sell the loans to.

Mortgage Brokers get themselves set up to represent multiple banks and investors and find your loan for you, process it and then use the money from the lender they are selling the loan to to fund the loan.

Mortgage Bankers get themselves set up to represent several investors and banks too but when they go to fund the loan they use a their line of credit to fund the loan, THEN sell it to the same place the broker is going sell it to.

The end result is the same, both charge the same basic fees most of the time, but because the broker is using someone elses money to fund the loan, they are required to disclose their profit. A mortgage bank does not.

The big advantage a mortgage bank has is that they control the entire transaction. The pricing is about the same for both.
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By ron d on July 1st, 2009 at 2:11 pm

jamesnbarnes hit it on the nose.

I worked as banker and broker

When working as a banker I have so advantages over broking.
The fees and rates are all the same, but you may not see all the fees as a banker……

Both are using other people money, a mortgage banker is a direct lender, the broker can do the same thing. It’s a about closing the loan, but in whos name.
References :
No money down http://1stmdloans.com

By nick k on July 1st, 2009 at 2:13 pm

I agree with everything above, but Mortgage Bankers have better rates since they directly sell the loan to the investor, they typically have more control over your loan since they are using their own money, and they typically have in house underwriters whereas brokers have to send the loan to be underwritten. I have worked for both as well. The issue about the rates really comes down to who you work with, and what they are willing to offer you.
References :
Licensed lender in OH, FL, SC, and IN.

http://www.nickkusan.com

By Dan on July 1st, 2009 at 2:17 pm

One buys stocks and cars while the other buys food.
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