Know what to expect: Mortgage Brokers and Loan Officers

Either a mortgage broker or a mortgage banker can help you when it comes to applying for a mortgage loan. Because both give the same result (a new home), people often confuse the two. However, it is helpful to recognize the difference between them so you have clear expectations of them as you enter your mortgage process.

Mortgage Brokers

A mortgage broker (either a firm or an individual) is an independent agent for the mortgage loan borrower as well as the lender. Your mortgage broker will stand as coordinator between you and the lending institution; which can be a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. A mortgage broker will examine your numbers to determine which lender is the best fit for you. You deliver your mortgage application to your broker, who presents it to a number of lenders. Your mortgage broker then assists your work with the lender of choice until the loan closes. The broker is given a commission from the borrower at closing.

What is a Mortgage Banker?

The biggest difference between a mortgage broker and a mortgage banker is that a mortgage banker works for a lending institution (a bank, credit union, or others) to offer and process loans only originated from the products of that institution. They may have the ability to offer loans to fit a variety of situations, but all the loans will be products from the same lender.

Also known as a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lending institution. From choosing a loan to closing, a loan officer will walk you through the process. Lenders compensate their mortgage bankers with a commission or salary.