Know the difference: Mortgage Brokers and Mortgage Bankers

Either a mortgage broker or a mortgage banker can assist you when you work on your application for a mortgage loan. It's easy to confuse these as both will yield the same outcome: a new home. However, it will be valuable to recognize the difference between them so you have clear expectations of them during your mortgage process.

What is a Mortgage Broker?

During the mortgage loan process, an individual or group who is an independent agent for both mortgage loan borrower and lender is a mortgage broker. A mortgage broker coordinates things for 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. Which lender offers the loans that fits your needs? A mortgage broker will help you find the right one. Your broker will present your mortgage application to a handful of lenders, and works with the chosen lender until closing. At closing, the broker's commission is paid by the borrower.

Mortgage Bankers

The biggest difference between a mortgage broker and a mortgage banker is that the latter works for a lending institution (a bank, credit union, or others) to process loans solely originated from the products of that institution. Although a loan officer may market quite a variety of loan programs, they will be products with that one lender.

A mortgage banker will represent you to the bank or other lending institution. A mortgage banker can guide the borrower through the application, processing and closing of the loan. Lending institutions pay their loan officers a salary or commission.