When seeking financing to buy a home, many homeowners work with either a mortgage broker or a mortgage banker. While the terms are often used interchangeably, brokers and bankers play different roles in the mortgage industry.
Here is a quick guide to mortgage bankers to help you learn more:
While they have similar names, mortgage brokers and mortgage bankers have very different jobs. A mortgage broker will assist you in finding a good deal on mortgage loans from multiple lenders. A mortgage banker actually originates and funds the loan.
Unlike banks, mortgage brokers are not financing loans themselves — they simply help you choose a loan that best suits you. A lender uses their cash to provide borrowed money, while the broker provides only assistance from the lender to the borrower.
Mortgage bankers usually work for banks in a specific lending department. Their work involves evaluating mortgage applications to determine if a potential borrower meets the financial institution requirements. Some mortgage bankers specialize in a specific type of mortgage, which can be helpful for borrowers with unique circumstances.
Mortgage bankers may also service or sell loans. As a loan servicer, they handle the payment processing aspect of the loan. This can include managing escrow accounts and providing payoff letters.
Some mortgage bankers sell loans to third-party servicers. This gives them a better opportunity to provide loans to additional borrowers, since it frees up their cash on hand.
How do you choose between a mortgage banker and a mortgage broker? There are advantages and disadvantages to both options, and much of the choice comes down to personal preference.
However, understanding the way a mortgage banker works in comparison with how a mortgage broker works will help loan applicants make the best decision for their financial future.
Kimberly Kelly decided to get her real estate license when she moved to South Orange with her family and fell in love with the classic, period homes of the area. Having worked in the city for many years for LexisNexis, Kim understands the appeal of an easy commute to NYC. That’s why she specializes in towns along the Mid-Town Direct train line, offering welcoming communities, good schools, and space to grow.
Very active in her children’s school PTA, Kim knows firsthand how important a school system is to parents looking to make the move to the ‘burbs. She volunteers with fairs, fundraising, and other activities that bolster support for education. Kim also believes involvement in the greater community enriches us all and has sat on various boards & associations throughout the years.
Kim Kelly has lived many places throughout her life, from Pennsylvania to Oregon, but has found New Jersey to be the ideal place to raise her family and put down roots. She loves nothing more than helping others discover their special place as well. Kim’s extensive knowledge of the area, combined with her sense of community, offers clients a personalized guide to finding the right house - and town - to call home.
