How to Find the Best Mortgage

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Differences Between Mortgage Brokers and Loan Officers - Quicken Loans Zing BlogMortgage broker and loan officer are just two of the terms for individuals who work in the mortgage industry. The difference between them is basically how they’re paid. Mortgage brokers do most of the heavy lifting for you by finding a lender and loan option, and they get paid a percentage of your final loan value. Loan officers work for an institution like a bank, mortgage lender or credit union, and they’re paid to write loans for their company.

Let’s take a closer look at how these two professions work.

Mortgage Brokers

Mortgage brokers don’t work for a specific institution. Instead, they develop relationships with many institutions and then try to find the best loan for your needs. A broker doesn’t lend you money; they find someone who will. A broker will have you fill out an application to get an idea of your financial situation, and they’ll pull your credit as part of the application process.

The broker will take your credit score and financial information and look at different lenders and loan options to find the best one for you. Mortgage brokers can be better for people with low credit scores, because the broker can you help find a lender who’s willing to work with clients with lower scores. Brokers will usually work with you and the lender throughout the loan process, and the broker is usually paid a percentage of the mortgage amount by the lender.

A broker’s job is to find you the best mortgage rate, term and cost for your specific situation, and since you don’t usually have to pay them (at least directly), they can be a good option. Remember, though, your broker is going to find you the best option from the lenders he or she has a relationship with – a broker isn’t looking at options from every major lender. Although they’re doing a lot of the work for you and have a lot of knowledge and experience that you might not have, they could be limiting your options.

If you want to work with a broker, try to find someone a friend or family member has worked with so you have some kind of a reference. When you find a broker, ask about his or her experience level, relationships with lenders, and any licenses and training he or she might have. Trulia.com recommends only working with someone who has a least five years of experience.

Loan Officers

A loan officer is someone who works for a bank or lender to write loans for that company. They’re also called mortgage bankers, home loan consultants, mortgage planners, mortgage consultants and mortgage loan originators, according to Zillow.com. Not to be more confusing, but the term loan originator can refer to an individual, or to the company the individual works for.

Like a mortgage broker, a loan officer is going to have you fill out an application and pull your credit report to get an understanding your financial situation. The loan officer will then recommend the best loan for you out of his or her company’s loan options.

Keep in mind, a mortgage broker has to specialize in lenders and individual loan programs, while a loan officer only has to specialize in the individual programs from the company they work for. By using a loan officer, you may get a better choice of loan option than when working with a mortgage broker.

While this wasn’t necessarily a pro/con article, you can see that there are differences between working with a mortgage broker and a loan officer. Your best bet is to always do some of your own research first, and come to the table as an educated consumer. Do you have any other questions about mortgage professionals, or the mortgage process in general? Ask away!



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