Mortgage Services

You've found the house of your dreams, now it's time to find the funding needed to purchase it. Two terms you will be faced with in the mortgage financing world are mortgage broker and mortgage bankers. The terms are similar but they have a world of difference in meaning. This article aims to look at the difference between the two, and what that means to you as you look for mortgage financing.

Mortgage Brokers; Show Me A Bunch Of Guys With The Money

First, let's look at mortgage brokers. Brokers are the middlemen in the mortgage industry. They are the ones that put lenders and borrowers together. Brokers have a large list of lenders that have different terms and conditions available as well as different loan types. A broker is familiar with who has what type of loans available and will put borrowers together with the best fit lenders. Brokers do not do any actual lending of money.

What A Mortgage Banker Does

Mortgage bankers on the other hand do lend money for mortgages. In fact, they lend their own money. Then once a mortgage is established, a mortgage banker either keeps the loan in his portfolio, and services the loan himself, or he may choose to sell the loan to another party. Mortgage bankers may get money to lend from sources such as Freddie Mac or Fannie Mae.

Unlike a savings bank, a mortgage bank doesn't offer accounts like savings or checking accounts. They deal only in mortgage financing. Unlike a savings bank, they don't get their revenue from customer accounts.

The same difference between mortgage brokers and mortgage bankers applies to the commercial field too. Be aware that some mortgage brokers will wrongly try to pass themselves off as mortgage bankers. They'll set up the loan then turn around and sell it immediately, they never had the money to loan in the first place.

Naturally, when shopping for a mortgage, a mortgage banker is only going to give you rates in regard to his bank. Therefore, you'd be well advised to do plenty of shopping around before you sign on the dotted line. Rates will vary wildly from bank to bank. And with the surge in popularity of searching the Internet for mortgages, bankers find themselves having to compete with more lenders, and will work with you a bit more to put together a loan that fits your situation.

Just keep in mind there are many different types of lenders available to put together the right mortgage package for you. A mortgage banker may be able to get you better rates due to eliminating the middleman.

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