Mortgage Broker and Mortgage Banker

When you work on your application for a mortgage , you may work with a mortgage banker or you may choose to work with a mortgage broker. People sometimes confuse these because both will reap the same outcome: a new home. However, it will be beneficial to know the difference between the two jobs so you have clear expectations of them during the mortgage application process.

What is a Mortgage Broker?

During the mortgage loan process, an individual or company who is an independent agent for the mortgage loan applicant as well as the lender is a mortgage broker. A mortgage broker facilitates 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 an individual, 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, private investor. A mortgage broker can consider your finances to determine which lender is the best fit for you. From application to closing, your mortgage broker works with you: presenting your mortgage application to several lenders, and walking you with the chosen lender through to closing. The broker receives a commission from the borrower if the loan closes.

About Loan Officers

The most important difference between a mortgage broker and a loan officer is that the latter is employed by a lending institution (a bank, credit union, or others) to process loans only from the programs of that institution. There can be a wide range of loans types to choose from even though all are programs of that specific lender.

A mortgage banker (also known as an "account executive" or "loan representative") represents the borrower to the lending institution. The borrower is walked through the entire process, from choosing the loan to closing, by the loan officer. Mortgage bankers can be given a commission or salary for their services by their employers.