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Purchasing a house or property is normally the largest investment a consumer will make. A myriad of technicalities and regulations help to govern that process of lending. Two of the professionals that assist a potential buyer in securing a mortgage are the mortgage broker and mortgage banker. Many people are under the misinterpretation that they are the same. Both provide very different benefits and services for securing a mortgage.

The Mortgage Broker

There are many banks and lending institutions out there willing to finance a mortgage. Each potential borrower will have their own personal circumstances and desires for their loan. A mortgage broker serves as an intermediary between the consumer and lender. The broker will take the personal circumstances and considerations of the borrower into account to find an optimal lender.

The Mortgage Banker

The mortgage banker is the actual lender of the funds. Their institution is where payments will be made for the duration of the mortgage. Submitting an application for credit with a banker will go onto the applicant's credit report. Therefore, the borrower should be certain that a particular mortgage banker can provide an optimal loan solution for their needs.

Making Effective Use of Services

The mortgage broker and banker both receive payments in different ways. The broker is typically paid by connecting a borrower and lender. The banker receives much of their income through service and interest payments made on the loan. Thus, both agents have different motivations for wanting to close loans. The broker wants to find the right lender quickly and efficiently. The banker wants to ensure that the lender will be able to pay on their loan in the long run.

A common approach is to provide relevant information to a mortgage broker who will then find a suitable banker. It is an important approach because the inquiry made through a broker will not be reflected on the borrower's credit report. An applicant who is turned down initially by a banker will have that negative mark on their report, making it harder to get a good rate or a loan.

The borrower should have a solid idea of what they are looking for in a mortgage. The mortgage broker can assist in establishing what a realistic loan would be for the borrower and the best type of repayment schedule. It is never a good idea to simply apply for a mortgage without some professional assistance. Consultation with a mortgage broker or other financial professional can help shed light on problems before an application is ever submitted.

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Q: Finance A Home Loan With The Help Of A Mortgage Broker And Banker?
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