Mortgage broker vs loan officer

1. Mortgage broker vs loan officer: Who to choose? Many people are confused about the difference between a mortgage broker vs. loan officer. Who wouldn’t be? When it comes to getting a mortgage, you have two options from whom to get professional help from: a mortgage broker or a loan officer. That is why many people think that these two are synonymous with each other. But, do you really know their difference? Well, learning the difference between a mortgage broker vs. loan officer is actually beneficial. They offer varying terms, so you’ll know whose offer will suit your needs and capabilities when you apply for a home mortgage loan. Similarities and Differences: Mortgage Broker vs. Loan Officer In this article, we will discuss three key points by which a mortgage broker and a loan officer differ. These aspects include: the types of home mortgage loan programs handled, home loan rates offered, fees and professional charges. Types of home mortgage loan programs handled When it comes to home mortgage loan programs, there are generally five types offered by both a mortgage broker and loan officer. These home mortgage loan programs are: Conventional Home Loan This loan has no federal government backing and is a fit for applicants with good credit scores. However, when using this home mortgage loan program, the applicants must pass the standards put in place by the Federal Housing Finance Agency (Fannie Mae) before getting their home loan fully approved. Jumbo Home Loan This loan is best for borrowers who exceed the Conventional home loan limits and who are interested in much more expensive homes. Government-Insured Loans (FHA and VA) These home mortgage loans are for applicants with lower credit scores and who need or want minimal down payment requirements. Both the FHA home mortgage loan and the VA (Veterans) home mortgage loan are government backed home mortgage loans. FHA requires a 3.50% down payment where the VA Veterans loan has a zero down payment requirement.Generally, these loans have support from the Federal Housing Administration, the U.S. Department of Agriculture, and the U.S. Department of Veteran Affairs. Fixed-Rate Mortgages

2. This type of home mortgage loan option has a fixed interest rate that will not change during the life of the home mortgage loan. For example, if you choose a 30 year fixed mortgage loan option you will have the same interest rate and payment for all 30 years. Adjustable-Rate Mortgages An opposite of the fixed-rate mortgage, the adjustable-rate mortgage is suitable for borrowers with short term objectives. If you choose an adjustable rate mortgage option this home loan can adjust after a period of time such as 3 years, 5 years, 7 years or 10 years or it can also adjust semi-annually. Make sure to read the terms and conditions very carefully on adjustable rate mortgages. Loan Interest Rates Offered Regarding loan interest rates, a loan officer generally offers only the interest rates sponsored by the bank, credit union, or any financial institution they are working for. On the other hand, a mortgage broker can shop interest loan rates for you with several different home mortgage lenders. Generally, a mortgage broker researches and compares different companies. Fees and Professional Charges Both mortgage brokers and loan officers are paid a commission by their employer when your home mortgage loan funds. Loan officers at a bank, credit union, or direct lender tend to have lower fees than a mortgage broker. Mortgage brokers get paid by charging professional fees to you and or the financial institution that agreed to give you a home mortgage loan. Make sure to look over fees very closely. Clearly Express Your Expectations When you approach a mortgage broker or loan officer, and you already have an idea of what Home mortgage loan program you are interested in you should let them know. It is also okay if you have no idea at all as you can discuss your objectives, wants, and needs to narrow down the best home mortgage loan program for you. Letting them know is showing them that you have done your research already and are familiar with the home mortgage loan programs available to you. Aside from that, expressing your expectations to them also makes your capabilities and challenges known to them. This way, they can better understand where you are at and where you’re coming from so you can get the most suitable terms. Make An Agreement Regarding The Loan Process Making an agreement about the home mortgage loan process is crucial, especially if there are special terms that you agreed on. Doing so will ensure that the things you have discussed and mutually agreed on with your mortgage broker or loan officer will not be altered and will still be effective even later on in the home loan qualifying process.

3. For example, if you have agreed upon a certain interest rate, make sure you are provided a rate lock agreement immediately. This agreement benefits you because even if the interest rates skyrocket in the near future, you only have to pay the interest rate stated on your rate lock disclosure agreement. If the interest rate is not honored on your rate lock disclosure agreement by a mortgage broker or loan officer you have grounds to seek legal action for breach of contract. Compare Your Options When it comes to home mortgage loan programs, always compare many different options. Remember, there are various mortgage types and loan types available. In addition to that, mortgage brokers and loan officers will also have varying terms and fees. It is best to review all of them upfront and compare them with each other to make sure that you are getting the best deal available to you. Furthermore, don’t hesitate to tell your loan officer or mortgage broker that you think someone is offering you a better deal. Most of the time, they will try to give you a counter offer to earn your business and not lose your deal. Still Confused Between A Mortgage Broker vs. Loan Officer? If you are still confused between a mortgage broker vs. loan officer, the next best step is to visit www.firsthousefinancing.com where they will explain in detail how to choose the right home mortgage lender for you. Luckily, First House Financing has over 30 years of mortgage experience. They provide you education, valuable information, and can help you secure the best deals for your new house easily!