Mortgage Broker Vs. Mortgage Loan Officer

Mortgage Broker Vs. Loan Officer

Should you go to the bank to deal with a mortgage loan officer or use a broker for your mortgage? Here are 3 reasons why a mortgage broker is better.

When seeking a mortgage loan, borrowers have the option of dealing the bank’s mortgage loan officer or hiring their own mortgage broker. While these terms are often used interchangeably, they are actually quite different.

Before pursuing a home mortgage or refinance, borrowers should understand the role of each professional they are working with.

Watch this short video: Broker -vs- Bank

What is the Difference Between a Mortgage Loan Broker and Mortgage Loan Officer?

Mortgage brokers are independent contractors. They serve as an intermediary between the borrower and the lender.

Brokers take care of most of the workload involved in securing and processing the loan. They are paid by the borrower, typically a percentage of the total loan value. Payment occurs after the loan closes.

A mortgage loan officer works for the lender. They also work directly with the borrower during the loan process, but their loyalty is to their employer.

Advantages of Working with a Mortgage Broker

Borrowers may initially be inclined to save money by working with a lender-provided mortgage loan officer. However, there are many advantages to using a broker instead.

Here are the top three reasons why you need a mortgage loan broker.

Pre-Qualification

When a loan application is denied, borrowers may need to submit applications to several additional lenders. This won’t negatively affect your credit, but it can be very frustrating and time-consuming.

Mortgage brokers are able to avoid this problem by using sophisticated software. This allows them to quickly analyze the financial situation and match the borrower up with the lenders that are most likely to approve the loan.

Comparison Shopping

As independent contractors, mortgage loan brokers usually have working relationships with multiple institutions. They help borrowers get the best deal by:

• Evaluating the borrower’s financial information
• Finding the best loan for the specific circumstances
• Shopping around for the best interest rates

Loan officers, on the other hand, only have access to the loans offered by their own lending institution.

Experience and Expertise

Think of a mortgage broker like a personal concierge. They are familiar with the lender’s application process and documentation requirements.

Even if you’ve taken all the recommended steps to prepare yourself for mortgage loan approval, problems can occur. When issues arise, mortgage brokers can act as a middleman. This makes the entire process much easier for the borrower.

Brokers can use their knowledge to find lenders willing to work with nonconventional borrowers. In some circumstances, a broker may help borrowers avoid lenders known to have a questionable reputation.

The Bottom Line

Mortgage brokers typically charge a fee of approximately one percent of the total loan cost. However, borrowers who use them often end up saving money in the long run.
The primary advantages mortgage brokers bring to the table include:

• Speeding up the loan process
• Shopping for the best options
• Dealing directly with bank lenders

At the end of the day, most borrowers agree that their mortgage broker was well worth the added expense.

New Florida Mortgage has helped thousands of borrowers shop mortgage options and compare rates. Our staff is knowledgeable, responsible, and experienced.

Our number one goal is to help make the mortgage lending process as painless as possible. Contact us today for a consultation.