Know the difference: Mortgage Brokers and Mortgage Bankers

When you work on your application for a mortgage , you may work with a loan officer or you may choose to work with a mortgage broker. Since a new home is the outcome of the work of both mortgage broker and mortgage banker, people frequently confuse the two. Yet 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?

A mortgage broker is someone or group that works as an independent agent for both the mortgage loan borrower and the lender. 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 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 will consider your numbers to determine which lender is the right fit for you. From application to closing, your mortgage broker facilitates the loan process: presenting your mortgage application to a number of lenders, and coordinating the process with the lender through to closing. The broker receives a commission from the borrower upon closing.

About Mortgage Bankers

The biggest difference between a mortgage broker and a mortgage banker is that a loan officer works for a lending institution (a bank, credit union, or others) to process loans solely from the programs of that institution. They may be able to offer loans to fit a variety of situations, but all the loans are products from the same lender.

Also called a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lender. From finding a loan product to closing, a mortgage banker will walk you through the process. Loan officers are compensated with a commission or salary for their work by their employers.