Who Are Your Allies During the Loan Application
Who are the players behind the loan application approval
process? Are they all one in the same? Who is funding
the loan? It is a misnomer amongst many consumers that
‘mortgage companies’ are financial institutions
that lend their own money to fund a home loan. Alternatively,
the company that a consumer will deal with may be either
a mortgage broker, loan officer or a mortgage banker.
Generally, a loan officer or mortgage banker is the
direct lender who provides their organizations own currency.
Even though the primary mortgage market often vends
the home loan to the secondary market, the direct lender
or mortgage bankers will in certain cases continue to
administer servicing the account.
On the other side of the loan application approval
process, a mortgage broker is the ‘home loan liaison.’
The mortgage broker acts as the go between the consumer
and the lending institution. A good mortgage broker
will perform the grueling task of loan shopping for
the consumer, In turn, the loan specialist will analyze
and identify he best home financing opportunities for
the borrower. A number of lenders that the broker finds
for home loans do not transact business directly with
the consumer or the public and are referred to as a
As a mortgage banker and mortgage broker are not what
in the same. The choice of employing either to process
a home loan can be determined by answering the following
1) Do you prefer to use a mortgage professional who
can provide a variety of financing options during the
loan application approval process?
2) Does it matter to you if your financing is sold-off
to a secondary market?’
3) Do you require more flexibility in your home loan
application approval process?
4) Would you prefer to work with the type of loan specialist
who has access to the lowest interest rates, possible?
Should you answer YES to more than one of the above
questions, means that a mortgage broker is the best
approach for you to take while attempting to navigate
through the home loan application process. If you answered
NO, to most of the questions, a mortgage banker (primary
market) matches your home financing style. On the other
hand, if your answer is a 50-50 split, try working with
both a mortgage banker and mortgage broker to gauge