Mortgage Education: The Difference between Banker and Broker

The difference between mortgage bankers and mortgage brokers are not well understood by the average person these days. The terms are evenused loosely by real estate agents, attorneys, and others who are involved inthe industry, but really what is the difference?     

A mortgage broker is legally defined as a person who brings a borrower and lender together.  A broker will take your paperwork, run your credit, complete a mortgage application and then submit it to many different banks acting as a “middle man”. Some people would think this is a great thing having their loan shopped around to multiple banks, and it can be beneficial.  Although keep in mind a broker fee is usually charged for the work the broker did. Thebiggest flaw is usually the next step, once the broker finds the bank and yourpaperwork is sent over the broker loses control of your loan. It is now in thehands of the bank and underwriter to process and close your loan. Also as amortgage broker there isn’t any financial responsibility to the broker once theloan closes, they are paid their broker goes on his way.       

A mortgage banker is the lender, the one processing, underwriting, and closing your loan. Your mortgage banker takes your paperwork, and submits your application to their bank. There aren’t any broker fees since your dealing with the source which in most cases makes the process, faster and cheaper. Your banker is usually in direct contact with the underwriter so if any questions or concerns should arise your banker can clarify any discrepancies and keep your loan movingalong. For me on a personal note I like to establish a relationship with my client’sand keep everything transparent from start to finish. Doing so makes everyone comfortable throughout the entire process and satisfied in the end.

Provided by  Michael Vassallo (Licensed Mortgage Banker). For more information, call 631-806-5569.

mvassallo@financialequities.com

www.MVmortgages.com