Buying a Home

Thinking about becoming a homeowner? Unless you are one of the fortunate people who are able to pay cash for a home, your first step it to get prequalified for a home loan. This can be done through your Bank, Credit Union or a Mortgage Broker. This is an estimate of the type of loan, terms and amount you qualify according to your current financial status. A preapproval letter will be needed to accompany an offer to purchase a resale home. 

 

Mortgage Banker vs Mortgage Broker

From the borrowers view point there is not much difference between a Mortgage Broker and a Mortgage Banker. A lender is a lender. But knowing the difference can save you time and money. 

Mortgage Banker 

A mortgage bankers underwrite, approve and close loans for borrowers. The loan may later be sold to a retail bank, investment firm or Government Agencies such as Freddie Mac or Fannie Mae. A Mortgage Banker has access to a variety of home loans such as FHA, VA, Conventional and USAD. Mortgage Bankers focus only on mortgage loans and not other types of lending and personal loans. Mortgage Bankers are licensed loan officers and well versed in lending laws, lender guidelines and how to structure a home loan. 

Mortgage Broker

Mortgage Brokers federally licensed firms or individuals who sell loan programs on behalf of a lender. These companies guide a borrower to obtain loans through retail banks or or mortgage banks. They are able to shop different lenders and try to get the borrower the best rates and terms. The lender decides if they are willing to underwrite the loan, not mortgage broker. One advantage of using a Mortgage Broker over a Mortgage Banker is they are able to shop different lenders.