When you’re buying your first home, it’s important to find out how much you’ll be able to borrow from a lender. In the process of doing your research, you’ve come across two different and confusing terms, namely “mortgage bankers” and “mortgage brokers.” So how do they differ and more importantly, how can they help you in the home buying process? Just remember, when you’re searching for the right lender, don’t go with the first one you find in a Google search online.
What is a Mortgage Banker?
Mortgage bankers typically work in loan departments of banks, credit unions, or savings and loan associations. In other words, they work for some type of financial institution. They work with home buyers/borrowers and realtors throughout the mortgage process which involves everything from evaluating properties to gathering the buyer’s financial information and then putting everything together. Furthermore, a mortgage banker can advise the borrower of the different loan options available to them within that institution.
Additionally, mortgage bankers are usually paid a salary by the financial institution they are employed by. However, some institutions may offer them performance bonuses or other financial incentives. Consequently, the mortgage banker’s first responsibility is to their employer or the financial institution they work for. They are responsible for making sure that all home loans are secured properly while at the same time ensuring that the borrower qualifies and can make their loan payments on time. You can always call on experts to know about the mortgages.
What is a Mortgage Broker?
Mortgage brokers work with numerous financial institutions and are not directly tied to any one exclusively. Because they have access to and can work with multiple lenders, they can find the best interest rate on home loans that fit your needs. Unlike mortgage bankers who lend funds from the institution they work for, mortgage brokers act as the middlemen or represent you to the lender. Furthermore, mortgage brokers compare interest rates between different financial institutions whereas a mortgage banker cannot. There are subtle differences that you need to be aware of.
Mortgage brokers are more of a representative for the borrower rather than the lender. They are responsible for getting the best mortgage rate possible, no matter which lending institution they obtain it from. Mortgage brokers earn commissions based on the difference between the rate they give the borrower and the rate they get from the lender. On the other hand, some mortgage brokers charge a flat fee that equates to a percentage of the loans value.
To learn more about how a mortgage broker can help get you the best rate on a home loan, contact Granite West Funding today. We’d be happy to work with you in selecting the best mortgage product for your custom needs. Our mortgage experts are available to discuss your requirements. Call us at (559) 540-2275.