The 411 on Brokers, Lenders, and Loan Officers
When buying a new home for the first time there are many terms that are thrown at us and we aren’t sure what they mean or if they even matter. Having a real estate agent can help us to navigate the uncharted home buying waters. Buying a home can feel complicated enough without knowing who to talk to and when.
We wanted to take a minute to help you understand the difference between mortgage brokers, lenders, and loan officers and how they can help you. Once you learn what each one of them does, what they cost, and what it means for you, you’ll have information you need to be informed during the process.
Loan Officer
A loan officer is there to help you with the application process. They are familiar with the process and the different types of loans offered by their financial institutions. When you initially call your bank or credit union to apply for a loan and provide the necessary documents you will be directed to a loan officer. Loan officers work with their institution to offer you loans and rates offered by their employer. You can get an FHA, conventional, jumbo loan and more depending on what that institution offers. Your loan officer will focus on helping you find the right loan for you that you can qualify for and afford.
Why do you need one?
A loan officer is employed by an institution to help you gather information needed to qualify for and receive a loan. Your loan officer is an advocate and educator for you. They want to help you close because that is how they gain their commissions. You can change loan officers if you find that the one you’re assigned doesn’t suit your personality or needs.
Mortgage Broker
A mortgage broker is an intermediary that helps you to find the best lender. They can help you have a better idea of the type of mortgages available. A Mortgage broker is sort of your real estate cupid. They help match up the borrowers with loan officers and mortgage lenders. The broker can help you fill out mortgage applications and can ask questions to determine the best loan officer or lender for your credit and income level. Your broker will help you to compare the pros and cons of the different loan types and terms.
Why do you need one?
Time is a non-renewable resource. Your mortgage broker will save you the time of searching independently. They will present you the best deals available. Mortgage Brokers earn commissions based upon the size of the loan, but these costs will be helpful to anyone with complex financing or debt history.
Lender
Lenders are the ones that provide the financial support to the client, who agrees to pay back the loan over time with interest. Lenders are either a group, individual, or a financial institution that can make funds available to a business or person that they will expect to be repaid. Lenders come in all varieties and can sometimes negate the need for a mortgage broker.
Why do you need one?
Unless you’re independently wealthy and have cash to purchase your home you will need a lender. Rates change daily and sometimes it can be tricky to find the best lender, but there are resources to help.
All three of these have the same end goal to help you to obtain financing in the easiest and smoothest way possible. Interview and find the best people possible and establish relationships that will endure the life of your loan.
