Mortgage bankers and brokers can both help home buyers secure loans. Both are typically required to secure bonds to guarantee applicable laws are followed. The primary difference between mortgage bankers and brokers is: mortgage bankers work for one financial institution, while brokers work with many lenders. Either can be helpful, depending on the goals of the buyer.
Speed, Options, Fees
Homebuyers have different priorities when it comes down to getting the deal done. For some, speed to close is critical. Others may need options to overcome credit challenges or provide special terms. Of course most people want a great loan, with minimum stress and low fees. Good mortgage bankers and brokers can be helpful toward these goals, though they will go at them differently. Business Insider offers this summation of the primary difference between how mortgage bankers and brokers arrange loans:
A mortgage banker is an employee who works for and offers loan products from a single lender. That lender underwrites the loan, handles the closing, and provides the funds. The process is generally streamlined in-house by working with a mortgage banker.
A mortgage broker is an agent who finds or negotiates a residential mortgage loan on behalf of an applicant in exchange for a commission. They work with multiple lenders, which means they have greater access to different mortgage products and terms.
In addition to the possibility of relative speed and streamlining, mortgage bankers are sometimes able to arrange special terms for existing customers. Ultimately, mortgage bankers work for the bank—not the borrower—so terms and options are limited to what the bank offers. Mortgage brokers work on behalf of the applicant, and can shop around for the best available fees and rates. Experts advice, when choosing between a mortgage banker or broker, it’s best for buyers to accurately compare what’s being offered:
When it comes to your money and whether a mortgage banker or a mortgage broker would be best to work with, only one thing is certain: be sure you’re comparing apples to apples when you’re looking at the terms of your loan. This means you’ll want a loan estimate from each. This standardized document lists the annual percentage rage (APR), fees, and true costs of the loans. When comparing loans side by side, you can find one that is truly best for you and your circumstances.
Mortgage Banker and Mortgage Broker Bonds
State laws require mortgage bankers and mortgage brokers to be bonded. Mortgage banker and mortgage broker bonds act as a guarantee to the public that all applicable government rules and regulations are followed as business is conducted. Mortgage banker and broker bonds, for example, protect the public from fraud, forgery and misrepresentation by the holder of the bond. Mortgage banker bonds and mortgage broker bonds are surety bonds. Like all surety bonds, mortgage banker and broker bonds have three parties: the principal (the person obtaining the bond); the obligee (state office requiring the bond); and the surety (the company writing the bond).
At Colonial Surety it is so easy and speedy to obtain a mortgage banker or broker bond that it can be done within minutes. We are a direct, and digital writer of mortgage banker and broker bonds for every state. The premium is based on the amount of the bond required by your state. As a direct bond writer, Colonial offers our lowest possible rate. Unlike agents and middlemen, Colonial does not have any hidden or fluctuating fees. It’s cost-efficient (and fast) to skip the shuffling around and get your bond directly from Colonial.To obtain your mortgage banker or broker bond today, just: get your online quote, enter your info and payment and then download or print your bond—instantly. It’s so easy you can do it now.
Good To Know
Surety bonds are a form of protection for the public. In many states surety bonds are a prerequisite for professional licensure to legally operate a business. However, surety bonds do not protect professionals from client claims of negligence, oversights, incorrect advice, or other errors and omissions. That’s why Professional Liability Insurance is critical. Because even an allegation of wrongdoing can spiral into a business ending disaster for professionals, Colonial Surety provides affordable Professional Liability Insurance–and for added value, even includes Cyber Liability Insurance with the policy. With this coverage, if you’re ever sued for negligence because mistakes were made or your work didn’t meet client expectations, we’ll cover legal defense expenses, as well as, the cost of settlements and judgments—whether or not it was your fault. Plus, you will have cyber breach response services—and more. Learn more and get your protection
As a national surety bond leader, Colonial makes it quick and efficient to obtain license bonds in just a few clicks, online, anytime, from anywhere. Founded in 1930, Colonial Surety Company is a leading direct seller and writer of surety bonds and insurance products across the USA. Colonial is rated “A Excellent” by A.M. Best Company and U.S. Treasury listed. Our customers have awarded us a 4.8 TrustScore—and they especially appreciate our speedy, easy service. You will too—we promise!