Know the difference: Mortgage Brokers and Mortgage Bankers

Either a mortgage broker or a mortgage banker can work with you when you work on your application for a mortgage loan. Since a new home is the result of the work of both mortgage broker and loan officer, it's understandable to confuse the two. However, it will be useful to know how they differ so you have clear expectations of them as you enter your mortgage process.

About Mortgage Brokers

A mortgage broker (either a company or an individual) is an independent agent for both the mortgage loan applicant and the lender. A mortgage broker coordinates things between you and your lender, which can be one of the following: a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. You work with a mortgage broker to look at your financial situation and lead you to the lender who has the best loan program for you. You deliver your mortgage loan application to your broker, who offers it to one or more lenders. Your mortgage broker then guides your work with the lender chosen until the closing of the loan. The broker gets a commission from the borrower when the loan closes.

What is a Mortgage Banker?

Loan officers are representatives of a specific lending institution (such as a bank) who work with mortgages and other lending programs originated by their employer alone. Although a loan officer may offer quite a range of loan programs, they will be programs from that lender alone.

Your mortgage banker will represent you to the bank or other lending institution. The borrower is helped through the whole process, from finding a loan to closing, by the mortgage banker. Either a salary or commission is paid to loan officers by their employers.

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