The mortgage industry is a big and vast financial sector. The industry has many bodies and professions, each with their own capabilities and functions. They include institutional lenders (government-controlled) such as savings and loans, credit unions or mortgage banking companies, and private lenders – not controlled by the government.
It may seem complicated to the inexperienced, but rest assured it isn’t. Many have no clue of how this market works. You might think that mortgage bankers, mortgage brokers, and loan officers are one and the same. They are different.
This post is to help you understand the different mortgage programs each offer. With this information, you as a borrower will make knowledgeable decisions when searching for your ideal mortgage.
What are Mortgage Brokers, Mortgage Bankers & Loan Officers
What are mortgage bankers
A mortgage banker is an individual or company that originates home loans (mortgages). They provide loans to the borrower. Bankers usually deny or approve a loan that you have requested. Once it is approved, there are usually two options – they will service the loan, meaning you make payments directly to them. They could sell the loan, which means you will make the payments to a different company.
Mortgage bankers are learned, many of them with college degrees. The standard of becoming one is high, both professionally and financially. They are also knowledgeable of government guidelines and regulations regarding loan underwritings. They receive their licenses under very strict rules and must have a high net worth.
What are mortgage brokers
Mortgage brokers are often confused with mortgage bankers. A mortgage broker is a company or an individual who helps you get the best deal by analyzing different lenders in the market. They are simply middlemen between you and the mortgage provider and will charge you for extra services provided.
Some of these services they offer are as follows:
- Finding deals that match your profile in the market.
- Suggesting the most convenient mortgages for your needs.
- Assist you in assessing your financial situation.
These services provide you with expertise crucial in this ever-changing and confusing mortgage industry. It is also convenient since you need not bury yourself in paperwork trying to find deals, all will be done, and the best solution will be brought to you.
The main difference between mortgage brokers and mortgage bankers is that mortgage brokers do not close mortgages in their own names. They only facilitate originations for other financial institutions. In contrast, mortgage bankers use their own funds in closing home loans.
What are loan officers
A loan officer is a person with a broad knowledge of the different types of loans provided by financial institutions. They have the working expertise of the conditions needed for you to qualify for any type of loan. They connect you with the institution and always try to find a loan in the parties’ best interest.
They usually work for credit unions, commercial banks, and mortgage companies. For a mortgage lender, they serve as the sales team. They only sell what their employers offer. They earn through commission, and charges they levy are not negotiable.
If you are looking or thinking of homeownership services in Florida, Cape Coral Mortgage would be happy to assist you.