This is a great post about how Loan Officers, Bankers, and Brokers are different. Many people don't understand the difference or even know there is a difference.
Below, you'll find it is spelled out in a clear to the point blog. Regardless of which direction you take, make sure you're using someone honest, up-front, knowledgeable, and with whom you feel comfortable.
Lending money and assembling a loan file to get money are two separate things. People who assemble your loan file are all called "loan officers." You can hire and pay the loan officer at the bank or hire an independent loan officer (mortgage broker) to complete this task for you.
Example: Take your car to the dealer (bank) or to an independent mechanic (broker).
Banks lend their money and offer loan programs that they have. Their loan officers do not shop various lenders and do not have the flexibility to go to a diffferent bank to get money if your loan is denied. They offer their rates only.
Bankers are loan officers who work for mortgage companies that offer mortgage loan products only. Bankers can only offer their loan products and cannot shop your loan with other lenders unless they are also licensed as a mortgage broker.
Mortgage brokers can go to just about any bank or mortgage company providing them flexibility to find the best terms. There is no guarantee that a broker will get you better terms than other loan officers, they just have more options. Brokers are required to meet federal and state licensing requirements in order to have the abllity to assemble (originate) a mortgage loan file.
Who has the best rates? Brokers do. Banks offer lower rates (wholesale rates) to the broker in an attempt to get their business. The cost of originating your loan is the difference. Some banks show all of the fees but mainly banks will offer a higher rate with reduced fees. To read more on this subject click here.
I am both a banker and a broker so there is no incentive for me to promote one over another.You can get great service or lousy service from any of the above. It really depends on the individual loan officer, their company and how they handle their business.
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Carla Freund of Ask Realtor Carla
Carla Freund Realty Team
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