Mortgage Broker Vs. Loan Officer Vs. Housing banker – Forbes Consultant

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When it comes to getting a home equity loan, there are so many options that can make you feel overwhelmed. Your choice can have a big impact on how much time you spend buying a mortgage and how much you will eventually pay. By learning about the key differences between three types of mortgage professionals — mortgage brokers, loan clerks, and mortgage bankers — you can see who can save you the most time and money.

Mortgage broker

Mortgage brokers will shop for mortgages on your behalf. They can save you time and money by looking for the best deals available for someone with your financial profile — assuming they are honest, good at their job and have relationships with many different mortgage lenders. Somewhat confused, the individuals and companies taking on this role are called both mortgage brokers.

A mortgage broker does not lend you money and also does not approve your loan application. However, they will gather information about your income, financial obligations and credit score to see what types of loans you can qualify for and which lenders will offer a loan.

If your finances are not strong enough to borrow as much as you would like, a broker should be able to tell you what you need to improve, such as paying off debt-to-income ratio (DTI) or accumulating debt. Longer history of timely payments to boost your credit score.

If a mortgage broker finds a loan that you want to get a loan with, it will be the middle ground between you and the lender. They will receive your full application, collect your supporting documents and announce any requests for additional information from the lender’s mortgage lender.

Loan clerk

Mortgage officers work for companies such as banks, credit unions or online direct lenders who lend money to borrowers to buy and refinance homes. They may be able to offer you different types of loans (Federal Housing Administration (FHA), FHA 203 (k), contract and jumbo) if offered by the financial institution in which they work. They may also be able to offer you different combinations of interest rates, points and commissions for specific loan products.

However, unlike brokers, all of these loans will only come from the loan clerk’s company, so your choice will be smaller. To receive offers from many lenders, you need to work with many lenders on different companies.

If you decide to go it cheap and risk the low bandwidth you are only fooling yourself. They will be the intermediary between you and the contractor and will help you reach the conclusion.

In all of these steps, a mortgage clerk performs the same function as a mortgage broker. The big difference between working with a mortgage broker versus a loan officer comes at the beginning, during the buying phase, where you are trying to find the best deal on a mortgage.

Housing banker

Mortgage bankers take your loan application, take it in, approve it and see you through the closing process. They will either lend you the money directly or take the money from a bank. They can also find you the best deal from the various banks with which they have relationships. As with real estate agents, a mortgage banker can refer to an individual or a company.

A mortgage banker can take out all kinds of loans, so you will have many options for loan products, as you would with a mortgage broker or some loan officer. In addition, they work with all types of applicants, including those who need an FHA loan because of their more relaxed qualifications or with military service members who want a VA loan.

Mortgage bankers usually have at least 10 years of experience, although this is not a statutory requirement and licensing regulations vary by state. This level of experience can be useful if your financial profile does not qualify for a contract loan that meets the borrowing requirements of Fannie Mae and Freddie Mac.

How can I decide which is best for me?

The best way to choose between a mortgage broker, a loan clerk and a mortgage banker is to talk to all of them. Many people are scared of the unknown mortgage process by not shopping. This is a huge mistake that can cost you thousands of dollars, if not tens of thousands of dollars.

You can and should seek offers from more than one broker, more than one banker and many loan officers. Spend a day, or two consecutive days, to gather all your offers. Market conditions change frequently, as does your credit report. You will not be able to make accurate comparisons if you receive prices with a difference of days or weeks.

By collecting multiple loan estimates (ideally, at least three to five) for the same mortgage product and loan duration, you can directly compare interest rates and commissions and see which option is most affordable.

That said, if you do not have a paid job, a credit score in the 700s, and a low debt-to-income ratio, you can save time by bypassing loan officers.

If you are self-employed, retired, using assets instead of income to qualify or belonging to another category of out-of-bounds applicant, you may be better served by a mortgage broker or mortgage banker. They usually have the experience and relationships to quickly match you to the right source of financing and have more options to choose from than loan officers.

How To Find The Right Mortgage Professional

Ask for referrals from friends, family, colleagues and your real estate agent. You should also check out online reviews, Better Business Bureau (BBB) ​​complaints and Complaints from the Office of Consumer Financial Protection (CFPB)..

All three of these mortgage professionals are regulated and licensed. However, if you are working with a loan officer, it may only be registered, not licensed. This does not mean that you should not work with a registered professional. can be perfectly able to provide what you need.

Either way, you should check their professional qualifications and any regulatory action that may have been taken against them. Get the Nationwide Multistate Licensing System & Registry (NMLS) number and look it up at NMLS Consumer Access Website. You can also search for them by name and state.

Ask mortgage professionals many questions before deciding whether to work with them. You may want to ask how much experience they have working with someone like you (eg low down borrower, veteran, small business owner), which lenders they work with (if you are talking to a broker or banker), how they are being reimbursed and the fees their.

In many cases, your loan will be sold after closing and a different company will become your loan server. While you definitely want to get excellent customer service during the application, contracting and closing process, do not choose the mortgage professional based on who you will enjoy working with for the next 15 or 30 years. You will probably never talk to them again once your transaction is settled.

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