what is the difference between a lender and a broker?

a lot of the words used to describe mortgage companies varies and often times not used correctly.. The term "Lender" is used for banks, brokers and broker banks.. A broker is a lender who uses multiple sources for financing and will work with as many as 30 or 40 different banks. Because of the variety of lending sources, they can often times find you a loan where you would never find on your own.. Banks are also lenders, however they only have a few different lending programs and their programs usually will not work for everyone.. Broker/bankers are broker's who have their own funds to lend as well. if they cannot fund a loan out of their own funds, they will find a different lender and broker it out.. Banks are usually the most expensive way to get a loan.. Under current laws, they don't have to disclose how much they are making on a loan, and they have much larger overhead.. Those costs are passed on to the home borrower.. And that's where the bulk of their income is from.. Banker/broker will be less than the bank, and can fund a loan on their own funds or from a brokered source.. Since they are a bank, their loan can still be a little more than elsewhere... Brokers will almost always get you a better deal since they have the lowest overhead and expenses.. Since they also work with numerous lenders, it easier to find the right loan for your particular scenario.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

By definition, a Bank is one who lends their own money. Like the big bank that can't correctly spell "City" or the Stagecoach people. These folks are called lenders because they lend their own money. A Mortgage Broker, on the other hand is a facilitator. They do not lend their own money. Instead they facilitate the origination of a loan for one of their customers by brokering the loan to another lender, such as the guys mentioned above. The Broker does all of the work in obtaining the documentation from you and then forwards the package to the Lender for underwriting approval, preparation of the new loan documents and funding. A Mortgage Banker is both. Like a bank, we lend our own money when making you a loan, and then sell the note off into the secondary market. One of the key advantages in working with a Mortgage Banker is WE control the underwriting. Our loans are underwritten by our own underwriters here in our offices. Your loan does not get stuck in line behind hundreds of loans from other brokers around the country. We also can broker the loan if the circumstance to your transaction make it more beneficial to you to do so. So with a Mortgage Banker, you get the best of both worlds. Read my blog post "Mortgage Professional vs. Bank Loan Officer" at: https://www.lender411.com/mortgage-articles/5737/mortgage-professional-vs-bank-loan-officer/ ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com 888-889-9950

A broker works with several "lenders", to provide consumers the best deal. A "lender" is also referred to as a "banker", because they're the "investor" that actually loans the money. It gets confusing because some "bankers" are also enabled to be "brokers".

I would have to disagree. Brokers are NOT lenders. A broker facilitates deals between a borrower and a bank(lender). A lender does not use a middle man or broker to complete loan transactions. Brokers are usually more expensive to deal with then lenders because each the brokers margin and the lenders margin must be met. The only way for that to occur is points to the borrower or a higher interest rate. Either way it is less favorable for the borrower. Although brokers are typically more expensive, they do have access to alot more loan programs than a typical lender would. This fact is sometimes very important for borrowers with poor credit scores or other issues that may get them denied at a lender. That being said, lenders are split into 2 additional categories. Lenders who service the loans that they originate, and Lenders who sell the loans they originate in the secondary market. Some Lenders can also broker loans to other lenders in the event that they do not have loan programs that fit the needs of a particular borrower. Great Question!

pretty much covered... I have the choice of working for a "direct lender" or a broker and after a ton of research I personally felt that a broker has more options to more programs and more rates options. I like options, I like giving me client the best rate in the country, there might be an extra processing fee involved than dealing with a lender, but I show people how that can be overcome in a hurry with a lower rate...