What is the difference between a Bank Loan Officer and a Mortgage Broker?

A Bank Loan Officer is a representative from a specific bank, credit union or other lending institution that will help you find a loan from the specific entity they are affiliated with. A bank loan officer is an employee of the lending institution and is able to offer a wide variety of loan types that all originate with their lending institution.

A Mortgage Broker is an independent contractor that is paid a fee to bring lenders and those needing a mortgage together. They work with many, sometimes hundreds of different lenders as freelance agents. A mortgage broker can usually find a lender that will give a mortgage to someone with just about any type of credit. Many online mortgage companies are mortgage brokers.

 Does it make a difference?

A bank loan officer is local so you will be able to go into their office and have a face-to-face conversation.

If you decide to go with a mortgage broker you will have access to many more lenders, which can be a benefit, and sometimes you can get a better rate. The down fall might be if the lender is not local and doesn’t understand all the technicalities of a property that might be specific to the area and local terms that appraisers would use. This could possibly slow-down the closing process.

A mortgage broker can usually find a lender that will make a loan that bank refuses, such as a borrower having low credit.  Loans for unique properties might also be easier to secure through a mortgage broker. 

As you can see there are pros and cons to both a bank loan officer and a mortgage broker. Ultimately you should use whoever can give you the best loan program and best interest rate for you particular situation.

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What is Buyer Representation? This is a word thrown around a lot click here to learn what it means and why it is important to have buyer representation when purchasing a home. Don’t buy a home without buyer representation!

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