Mortgage Broker and Mortgage Banker

When you need a mortgage loan, you should know the difference between a mortgage banker and a mortgage broker. Because a new home is the outcome of the work of both mortgage broker and mortgage banker, it's understandable to confuse the two job types. Yet it is beneficial to know how they differ so you know what to expect from them during your mortgage application process.

About Mortgage Brokers

During the mortgage loan process, an individual or group who is an independent agent for both mortgage loan applicant and lender is a mortgage broker. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. Which lender has the mortgage loans that fits your financial situation? A mortgage broker will help you find the best one. From application to closing, your mortgage broker works with you: presenting your application to a number of lenders, and walking you with the chosen lender through to closing. The borrower pays a commission to the broker if the loan closes.

What is a Mortgage Banker?

The biggest 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 solely originated from the programs of that institution. They may have the ability to offer loans to fit a variety of situations, but all the loans will be programs from the same lender.

A loan officer (also called an "account executive" or "loan representative") represents the borrower to the lending institution. From finding a loan program to closing, a loan officer can help a borrower through the process. Mortgage bankers will be given a commission or salary for their services by their employers.