Mortgage Broker and Mortgage Banker

When you're looking to get a mortgage , you may work with a loan officer or you may choose to work with a mortgage broker. As both reap the same outcome (a new home), people often confuse them. But as you enter the application process, it can help if you know how they are different.

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. A mortgage broker facilitates things between you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company or even an individual, private investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. You partner with a mortgage broker to review your financial situation and find the lender who has the best loan for you. Your broker will submit your loan application to several lenders, and works with the chosen lender until the loan closes. When the loan closes, the broker's commission is given by the borrower.

What is a Mortgage Banker?

The main difference between a mortgage broker and a mortgage banker is that the latter is employed by a lending institution (a bank, credit union, or others) to process loans solely from that institution. While a mortgage banker may market quite a variety of loans, they are all products with that lender alone.

Your mortgage banker will represent you to the bank or other lending institution. From selecting a loan product to closing, a loan officer will walk you through the process. Either a salary or commission is given to loan officers by their employers.