Mortgage Broker or Mortgage Banker

Either a mortgage broker or a mortgage banker may work with you when you're looking to get a mortgage loan. As both a mortgage broker and mortgage banker will help you purchase a new home, people usually confuse them. However, recognizing how they differ will be important to the mortgage loan process.

Mortgage Brokers

A mortgage broker is an individual or company that works as an independent agent for both the mortgage loan applicant and the lender. A mortgage broker coordinates 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 look at your finances to find out which lender is the right fit for you. You give your loan application to your broker, who offers it to several lenders. Your mortgage broker then guides your work with the lender of choice until the closing of the loan. The broker receives a commission from the borrower at closing.

Loan Officers

The main difference between a mortgage broker and a loan officer is that a mortgage banker works on behalf of a lending institution (a bank, credit union, or others) to offer and process loans only from the products of that institution. Although a mortgage banker may market quite a range of loan programs, they will be products of that one lender.

A mortgage banker (also known as an "account executive" or "loan representative") represents the borrower to the lender. The borrower is guided through the whole process, from loan selection to closing, by the loan officer. Either a salary or commission is given to mortgage brokers by their employers.