Mortgage Broker vs. Loan Officer
To arrange a new mortgage loan, you may work with a loan officer in a bank or you may choose to work with a mortgage broker. People often confuse the two job types even though both will glean the same results: a new home loan. However, it is important to understand the difference between the two types of jobs so you know what to expect from during the mortgage application process. A mortgage broker is an individual or firm that acts as an independent agent for both the borrower and the lender of a mortgage loan.
As required by law, mortgage brokers in California act as a fiduciary, keeping your best interests in mind. We represent you to the lending institution, which can be a bank, trust company, credit union, mortgage corporation, finance company or even an individual private investor. A mortgage broker will analyze your financial situation to determine which lender is the best fit for your loan needs. By law, Brokers fully disclose all compensation received for arranging a loan making pricing and loan decisions transparent to the borrower. Moreover, brokers create competition in the marketplace for your loan among the various lending institutions so you win.
A traditional bank loan officer, however, simply represents the bank in acquiring loan business. A bank loan officer is a representative of a single lending institution and they are not a fiduciary of the borrower. They typically do not have access to competing lenders rates and therefore have no incentive to suggest another lender may have better terms. Banks are not required to disclose their compensation making their pricing less transparent. Moreover, some lenders compensate loan officers differently depending on which product they sell. While this is fully within their rights, it may not be in the best interest of the borrower.
Broker or Loan Officer, we think the decision is clear cut. As professional brokers, Paragon Mortgage Group acts as your trusted advisor taking the care to educate the customer and disclose all important features of your proposed loan. Complete disclosure, and fiduciary duties taken seriously are what sets Paragon Mortgage Group apart.
