Mortgage Broker vs. Bank

When you're looking to get a mortgage loan, you may work with a bank loan officer or you may choose to work with a mortgage broker.  People often confuse the two. However, it is important to understand the difference between the two so you know what to expect from them during the mortgage application process.

A mortgage broker is an individual or firm that is licensed and regulated by the state.  They have to meet certain education and experience requirements in order to become licensed, and have to satisfy continuing education requirements to keep their license.  They usually only get paid if they get your loan approved, so they have an incentive to offer a broad range of loan products, and to work with as many borrowers as possible.

Mortgage brokers work with a variety of lending institutions, and if one lender does not like some aspect of your transaction or is not competitive on their pricing for that product, than the broker can send the loan to a more suitable lender.  Dream Home Funding has relationships with the wholesale divisions of every lender listed in the local phone book, plus many more, so when you come to us it's like visiting every one of those lenders in one visit, and when you go through Dream Home Funding you get wholesale pricing instead of the retail pricing you would receive if you went directly to those lenders. 

A loan officer is a representative of a lending institution who works to sell and process mortgages and other loans originated by their employer. They are not licensed, and there are no education or experience requirements except those of the institution they work for.  Some local loan officers have only a GED.  They are also not required to do any type of continuing education, and as a result are frequently not very knowledgeable about the most recent developments in the mortgage industry.  They often have a smaller variety of loan types to draw from, and may receive a salary in addition to any commissions whether they get your loan closed or not.