What's The Difference Between a Mortgage Broker and a Mortgage Originator?
If you're confused by these terms, you're not alone. They seem all but interchangeable.
In reality, they describe two very different roles. Indiana defines these terms by law. You can't call yourself one if you are, in fact, the other.
Knowing the difference can help you make informed decisions about navigating the mortgage process.
Brokers are an alternative to going to a bank for a home loan. They can help clients shop for loans from many different lenders and programs. They have been licensed specifically to do this.
Brokers don't have any money to lend. They essentially serve as a "middleman" between homeowners and bankers. They're a little like your local insurance agency, who may sell you a policy from one of eight or nine companies he or she works with.
Anyone who can take a borrower's mortgage loan application can be called a mortgage originator.
Loan Originators undergo light licensing requirements.
In Indiana, this means 20 hours of pre-licensing education. Loan originators must then pass the mortgage originator's exam. Loan originators must also undergo an FBI criminal background check, and a credit pull.
The loan originator's abilities depend on who they work for. An originator who works for a single bank can only help customers get loans from a single bank. A mortgage originator who works for a mortgage broker or a correspondent mortgage banker can help you shop multiple banks at once.
A&M Mortgage Group: The Best of Both Worlds
So which am I? I'm a mortgage originator working for a correspondent mortgage banker. Mortgage bankers fund their own loans, then sell the servicing to other banks or mortgage lenders, such as Wells Fargo, Suntrust, or Chase. They then service the loans. This gives you a situation that's very similar to a mortgage broker's in that I work with multiple lenders and programs.
But being a correspondent mortgage banker gives us more leverage than you'd ever get with a mortgage broker. The banks we work with are investing in our loans. That gives us access to the best pricing tiers. Meanwhile, mortgage brokers usually can't get better pricing than a bank's in-house mortgage originator.
I am a mortgage originator, and I can help you find the best fit in approval guidelines and funding. To get the best rates and loan packages available, call me, Larry the Mortgage guy, at 1-219-794-0600, ext. 241.