How does a mortgage broker differ from a lender?

A mortgage broker and a lender are different in that a mortgage broker is a person or organization that can act as an intermediary between a borrower and a lender. A mortgage broker will work with numerous lenders to find the borrower the best loan and terms for their specific situation. A lender, on the other hand, is the source of the loan being offered to the borrower. Usually, a bank or other financial institution, a lender is responsible for approving and funding a loan once the borrower has applied through them. In Kansas, mortgage brokers need to be licensed by the Office of the State Bank Commissioner and must comply with state and federal laws. They make their money by collecting a fee from the lender for their services. Mortgage brokers also provide advice to borrowers on the best type of mortgage loan terms and interest rates and often take part in negotiations with the lender. Lenders, on the other hand, must adhere to the specific mortgage laws of the state in which they lend. While brokers may use their knowledge to find the best loan terms, they do not provide loan approval and are not responsible for assessing the borrower’s creditworthiness. Lenders use their own criteria to determine creditworthiness and approve loans. In conclusion, mortgage brokers and lenders are different in that brokers are intermediaries between the borrower and the lender and provide knowledge and advice to borrowers, while lenders are the source of the loan and are responsible for approving and funding the loan.

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