Purchasing a new home is a matter of seriousness and demands you to take certain necessary steps. If you are new to the real estate world and have never experienced shopping for a mortgage before, this write-up is certainly going to help you out.
When looking to get a mortgage, you need to be extra careful as there are a number of mortgage lenders who can twist and tug the original home loan value at their convenience. It is, therefore, advised to always be vigilant while selecting a lender. But among all the mortgage brokers and loan officers, how to find the one that will help you the most and save you from a bad mortgage. Mortgage brokers and loan officers are often used interchangeably, but we need to understand that they have quite different roles. Here is what you need to know:
Table of Contents
- Mortgage Brokers-An Introduction
- About Loan Officers
- Difference Between a Mortgage Broker and Loan Officer:
- Selecting the Right Option To Trust!
Mortgage brokers play the role of a matchmaker for you as a borrower and your lending party. They act as a third-party entity and review your finances to determine which lending party is suitable for you. Working for both the borrowers and the lenders, they earn a pre-determined percent of the whole value on every mortgage shopped! Bear in mind that mortgage brokers extend the loan products of various lenders, often referred to as wholesalers. A mortgage broker may work for multiple lending parties, and, therefore, will have a vast range of offers for you.
Roles of a mortgage broker cover:
- Operating within the area and regional lending officers.
- Pay heed to the monetary account of potential buyers.
- Representing buyers throughout the mortgage application process.
About Loan Officers
When planning to buy a new house or looking for financing, people may run to a loan officer, working for a specified organization. A loan officer is quite clear on the lending products and deals of the firm (bank or credit union) that he is representing. Loan officers are also referred to as a vital part of the mortgage lender’s sales force. They review the application and verify the credentials and other information before recommending it. Loan officers usually earn a commission and the rates and deals they offer may not be negotiable.
The roles of a loan officer cover the following:
- Explicating loan terms and conditions to applicants.
- Be in contact with the best local real estate agencies.
- Keeping clients and agents renewed on developments in the loan markets.
- Analyzing loans for government conformance.
Mortgage brokers and loan officers are often spoken undifferentiated to each other. The key to finding the best mortgage deal is to apprehend the difference between these two and choose to hire the one who is most suited to your requirements.
A mortgage broker works to bridge the distance between you and your suitable lending party. He/she may have a wide variety of products to offer from various lenders. Whereas a loan officer works for a single organization (probably a bank). Loan officers are well-versed with their lending products and will also recommend you to an underwriter!
Mortgage Brokers Are Specific to Real Estate!
The loan officers are representatives of a firm while a mortgage broker acts as a facilitator between the lender and the lender. A loan officer may also review and refer your application for other loans such as business loans, study loans, and such. But a mortgage broker is, stringently, a real estate entity!
Commission vs Payroll
As the mortgage officers serve for multiple lending parties, they work on a specific commission (from every mortgage bought!) On the other hand, a loan officer is usually a payroll employee and has no authority whatsoever to refer a lender to a lender.
Loan officers do not have to maintain a professional relationship with local real estate agents, investors, borrowers, and other financial institutions, but a mortgage broker has to do it all! A mortgage broker does not follow a set job description. He is adaptable and just focuses on earning you the best deal!
Selecting the Right Option To Trust!
When it comes down to opting out for one of these two, look for the one with the best deals, rates, and services. Never settle for the first one you discover even if the deals seem favorable. Research, research, research! Before making up your mind, review the services of at least two or more loan officers and mortgage brokers. Compare the services, rates, fees, points, total closing costs, and all such of all of these service providers. It will help you to attain a more detailed and comprehensive overview of the situation at hand and assist you in buying an apt mortgage for your new place!